Deal Abstract
MSBAI
The Ultimate Engineering AI Assistant
Engineer is building Jarvis for real-life engineers. Pre-product, pre-revenue, but with growth opportunity as with all startups.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1070000 |
| 2. Fundraised So Far? | $420494.84 |
| 3. Pre-Money Valuation? | $5984000 |
| 4. Previous Year's Annual Revenue | $0 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-32500 |
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: Los Angeles, CA |
| 2. Has at least 2 founders? | True: Two |
| 3. Has product in the market? | False: Raising to go to market |
| 4. 6 months of continuous user growth or 6 months of revenue? | False: Not in market |
| 5. Notable investors? | False: No prior investors |
| 6. Post-funding, will have 18 months of runway? | True: No burn |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Better but is it 10x better? |
| 2. Timing? | 3 | Technology becoming more complex, if it works this timing is good |
| 3. Monopoly? | 1 | Few customers, only 4 in beta |
| 4. People? | 2 | Seems like team is well, but the fact that financials are from 2017-2018 not promising |
| 5. Distribution? | 2 | How to distribute to these SMBs they're talking about? |
| 6. Durability? | 3 | If they can build it, definitely stable |
| 7. Secret? | 2 | GURU can provide a smooth enough interface to commoditize sophisticated hardware computing power for SMBs |
What has to go right for the startup to return money on investment:
1. Launch a product publicly; 2. Monetize; 3. Actually solve real problem
What the Risks Are
1. Lofty ambition, no product to demonstrate proof; 2. Complexity is very hard to solve, see Bubble and the no-code movement; 3. Business model risk, what would be the willingness to pay for this, even when the product is still not totally polished yet?
Bonus Muhan's Notes
Real life Jarvis!
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.