Affiliate marketing GiftCrowd site is making money helping parents and students gift gifts. They make money off of gift card redemptions and suggesting certain things for sale.
|1. Fundraising Target?||$965000|
|2. Fundraised So Far?||$10609|
|3. Pre-Money Valuation?||$5790000|
|4. Previous Year's Annual Revenue||$2000000|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$240000|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: Tenafly, NJ|
|2. Has at least 2 founders?||False: Two|
|3. Has product in the market?||True: Revenue generating|
|4. 6 months of continuous user growth or 6 months of revenue?||True: Really impressive revenue growth|
|5. Notable investors?||False: No one I recognize|
|6. Post-funding, will have 18 months of runway?||True: Profitable?!|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|1. Engineering?||2||It's a SaaS platform for buying group gifts|
|2. Timing?||1||Not sure why this is the moment this idea will take off, it's been around since 2015|
|3. Monopoly?||4||Really strong revenue for essentially what is an affiliate marketing site|
|4. People?||2||Team seems fine but see the comments|
|5. Distribution?||3||Really good distribution, as per monopoly and revenue point|
|6. Durability?||2||Seems like an affiliate marketing play|
|7. Secret?||1||Group gift giving is about to experience explosive growth and affiliate marketing is going to be a unicorn business|
What has to go right for the startup to return money on investment:
1. Keep acquiring more schools and PTOs, 2. Provide and capture more value rather than just brokering the transaction; 3. Market size has to grow suddenly
What the Risks Are
1. Small business not a startup; 2. Ultimately this is just an affiliate marketing site; 3. Feature not a company
Bonus Muhan's Notes
Notably, look at the comment from Damianou T about the managements responses to his questions.
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.
Review these deal memos every time the startup raises a new round
Test if original thesis still applies
Notice trends in how you think
So, did I invest?Click here to find out.
Other thoughts, questions, comments, or concerns? Write me at firstname.lastname@example.org and let me know.