Deal Abstract

Alter ego to RAD wants to empower the prosumer video content producers to make testimonial videos and other content for companies. Insane revenue for valuation, actually hitting the rule-of-thumb 10x annual revenue benchmark. Run by a pair of brothers with the iron strength from the USSR. Invites you to ponder how the future of video content will be built.

Bonus: cmd + f "BONUS" to see the bonus Q&A summary I wrote after peppering the CEO with questions from my marketing experts Zaryn and Rafael.

The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)

Criteria Yes/No
1. A startup that is based in SV? No: New York, NY
2. Has at least 2 founders? Yes: Brothers
3. Has product in the market? Yes
4. 6 months of continuous user growth or 6 months of revenue? Yes: 2018 revenue to 2019 revenue increased from $865k to $1465k.
5. Notable investors? No: no one that I recognize.
6. Post-funding, will have 18 months of runway? No: 2019 burn was $176k, at time of writing has fundraised $76k and is shooting for $1070k as a round. At present only has half a year of runway, but they’re trying to raise more and they have 30+ days. That said, also raising institutional money side-by-side for the equity crowdfunding round.

The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)

Which Works Better, Kaizen Events or Daily Kaizen?
Referencing the 1. "Engineering?" question.
Question Score Notes
1. Engineering? 4 Is the future one-size-fits-all or hundred-flowers-bloom? In other words, is the future RAD or Insense? Why not bet on both?
2. Timing? 4 Very good. Authenticity has a premium (like this blog,) and the ability for indie creators to create and publish is the story of the 21st century.
3. Monopoly? 3 Not sure whether the thesis is right, but if it is, I can definitely see the market scaling. Revenue implies that they have a very strong start in a small market.
4. People? 4 Two co-founders are brothers.

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.