Deal Abstract
https://www.seedinvest.com/goodearthorganics/series.a
Enriched organic soil for cannabis and hemp growers. Larger startup with product and revenue established.
Financials (VRB)
|Question|Notes|
|---|---|---|
|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)
Criteria | Yes/No |
---|---|
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 |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
Question | Score | Notes |
---|---|---|
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
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