Robinhood for options trading. Has lots of brand name investors, but raising on a $25MM valuation with no revenue. Uncertain what the defensible secret is.
Shout out to reader DK for forwarding me the deal!
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The 6 Calacanis Characteristics (91 161 18)
|1. A startup that is based in SV||No: New York, NY.|
|2. Has at least 2 founders||Yes: Two.|
|3. Has product in the market||Yes|
|4. 6 months of continuous user growth or 6 months of revenue.||Yes: growing at 10%/week in usage. Acquired over 7,000 accounts since launch with an average funded account balance of over $1,100|
|5. Notable investors?||Yes: Barclays, Techstars, Rosecliff Ventures, SWS Ventures, Irish Angels and Plug & Play Ventures|
|6. Post-funding, will have 18 months of runway||Yes: 2019 burn was $1.1M, targeting $5MM in funding so coming in right around 60 months.|
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- Bad: Not seeing how it’s 10x better than Robinhood.
- The Timing question:
- Good: Robinhood has proven the appeal of commission-free trading among millennials.
- The monopoly question:
- Good: Can scale quickly.
- The people question:
- Fine: Team seems fine, but no experience in options startups or fintech businesses.
- The distribution question:
- Good: Direct to consumer.
- The durability question:
- Bad: This is my perennial concern: what’s to stop Robinhood doing to Gatsby what Facebook does to any of its competitors? (Instagram Stories for Snapchat, Reels for TikTok, etc.)
- *What is the hopeful secret?:
- There is a superior business model that Gatsby will have that can make it more lucrative and successful
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