Enriched organic soil for cannabis and hemp growers. Larger startup with product and revenue established.
|1. Fundraising Target? |$10000000|
|2. Fundraised So Far?|$613303|
|3. Pre-Money Valuation?|$23408305|
|4. Previous Year's Annual Revenue |$3088256|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-1121227|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: Cave Junction, OR|
|2. Has at least 2 founders?||True: Two|
|3. Has product in the market?||True:|
|4. 6 months of continuous user growth or 6 months of revenue?||True: 2018 revenue was 2.154m and in 2019 grew to 3.08m|
|5. Notable investors?||False: No notable tech investors|
|6. Post-funding, will have 18 months of runway?||True: At 1.8m will have 18 months, so it has a ways but will get in the ballpark|
|1. Engineering?||3||Soil explicitly enriched for cannibis|
|2. Timing?||3||Cannibis is growing right now|
|3. Monopoly?||2||Not sure but good revenue|
|4. People?||2||Team seems well, this is reasonably corporate at $23m|
|5. Distribution?||2||Traditional business|
|6. Durability?||3||Very durable, not easy for anyone to just come in and build another soil company for cannibis|
|7. Secret?||1||Enriched soil for cannibis grower is going to be a venture sized business|
What has to go right for the startup to return money on investment:
1. Continuing growing and scaling efficiently; 2. Support increasing margins and profitability of their vendors; 3. Fund research that show their soil is unequivocally better.
What the Risks Are
1. The entire market is $3bn as they said, so to grow to a $1bn in market cap it'd have to capture 10% of the market in the next few years; 2. Soil is not venture backable; 3. Larger producers of enriched soil provide their own cocktails of enriched soil for organic hemp growers.
Bonus Muhan's Notes
Oregon just passed the law legalizing a great deal of drugs under supervision, so expected medical/psychedelic/cannabis innovation to continue coming from there.
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 email@example.com and let me know.