Deal Abstract

https://www.seedinvest.com/heroclip/seed

Carabiner and hook clip together. 2019 revenue was more than $2 million with unit sales growing by 18% from 2018 – aggregating over 440,000 units sold since 2018 (unaudited.) Wants to build a lifestyle company on top of the platform of the initial product.

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The 6 Calacanis Characteristics (91 161 18)

Check	Yes/No
1. A startup that is based in SV	No: Seattle, WA
2. Has at least 2 founders	No: One founder.
3. Has product in the market	Yes
4. 6 months of continuous user growth or 6 months of revenue.	Yes, 2018 revenue was 1.9MM and 2019 revenue was 2.02M
5. Notable investors?	No: though the investors do seem to be active sports investors.
6. Post-funding, will have 18 months of runway	Yes: 2019 burn was $329k, raised $1.667M, so 5.06 years of runway.

The 7 Thiel Questions (ETMPDDS)

1. The Engineering question:
   • Good: better than the next best product.
2. The Timing question: 
   • Fine: not bad not phenomenal.
3. The monopoly question: 
   • Bad: Feel that this is is a nice-to-have product, not solving an urgent need.
4. The people question: 
   • Good Though Thin: Team is good but thin, only two full-time.
5. The distribution question: 
   • Fine: Needs to partner with retailers and also distribute via e-commerce.
6. The durability question: 
   • Good: Fine product business.
7. *What is the hopeful secret?: 
   • Not a venture product, not much secret.

What has to go right for the startup to return money on investment:

1. Investment will return money.

What the Risks Are

1. Not a venture backable business so lowers IRR

Muhan’s Bonus Notes

Investment came in from SeedInvest’s Auto Invest, hence the deal memo opting out.

Financials (References)

• Current Fundraised: $1.67M
• Valuation: ~$4.75MM

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

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