Deal Abstract

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

Source

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

Source

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

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Review these deal memos every time the startup raises a new round

Test if original thesis still applies

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So, did I invest?

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.