Deal Abstract
A startup for solar powered grills, thermos, chargers, and a variety of electronic appliances wants to disrupt the non-eco friendly incumbents.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $5000000 |
| 2. Fundraised So Far? | $1493166 |
| 3. Pre-Money Valuation? | $59900000 |
| 4. Previous Year's Annual Revenue | $3925165 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$2783 |
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: Cincinnati, OH |
| 2. Has at least 2 founders? | True: Two |
| 3. Has product in the market? | True: Revenue generating |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Grew from 2019 to 2020 significantly |
| 5. Notable investors? | False: No one I recognize |
| 6. Post-funding, will have 18 months of runway? | True: Barely profitable, but profitable |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | Impressive engineering |
| 2. Timing? | 1 | Not sure why demand for solar powered coolers, grills, and chargers is set to take off now |
| 3. Monopoly? | 2 | Solid market share but nothing on monopoly level |
| 4. People? | 3 | Team seems solid |
| 5. Distribution? | 1 | Where does one buy one of these? Amazon? Outdoor sporting shop? |
| 6. Durability? | 3 | Seems like the engineering is really solid and hard to replicate here |
| 7. Secret? | 1 | Solar powered electronics, grills, and thermos demand are set to grow like a j shaped hockey stick |
What has to go right for the startup to return money on investment:
1. Demand for solar powered everything has to go up; 2. Price points have to go down so this can go mass market; 3. New use cases with solar need to fill gaps that gas and traditional fuel failed at previously
What the Risks Are
1. Nice to have not a need to have; 2. Appliances and electronics based business won't grow as fast and needs to partner with traditional retail; 3. Poor unit economics (see the financial docs)
Bonus Muhan's Notes
Cool technology for sure
Updates
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 mail@muhanzhang.com and let me know.