Deal Abstract

New bank trying to create a marketplace where for every dollar you spend, it automatically locks up some of your funds in forced spending. No revenue, alleged connection to Acorn, and at best, a vitamin not a painkiller.

Want to invest alongside me? Subscribe to my premium newsletter, Startup Investing, to receive my exclusive recommendations on deals.

The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: Irvine, CA
2. Has at least 2 founders Yes (2)
3. Has product in the market Yes
4. 6 months of continuous user growth or 6 months of revenue.No: 2018 to 2019, no revenue
5. Notable investors?No
6. Post-funding, will have 18 months of runway Yes: Raised $898k in runway and 2019 burn was $130k, so 6.9 years.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question (Can you create breakthrough technology instead of incremental improvements?):
    • Bad: Totally an incremental improvement. Why not just have your paycheck auto deposit into two accounts? How is this better than Betterment’s cash sweep feature?
  2. The Timing question (Is now the right time to start your particular business?): 
    • Bad: See point 1.
  3. The monopoly question (Are starting with a big share from a small market?): 
    • Bad: Never heard of this company before today.
  4. The people question (Do you have the right team?): 
    • Average: Here’s Ingrassia’s LinkedIn, not even seeing Acorn on here. Link.
  5. The distribution question (Do you have a way to deliver your product?): 
    • Average: App store.
  6. The durability question (Will your market position be defensible 10 and 20 years into the future?): 
    • Bad: Literally any bank that does an auto allocation of bank account competes with this product.
  7. *What is the hopeful secret? (Have you identified an unique opportunity that others don’t see?): 

What has to go right for the startup to return money

Want to read the whole post?

You don't have access to this post on Startup Investing for All by Muhan Zhang at the moment, but if you upgrade your account you'll be able to see the whole thing, including comments, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.