Deal Abstract

Fully Autonomous Security Robots

Robotics startup with security bots looking like R2D2 wants to raise $25m on a $447m valuation to roll out omnipresent big brother police bots. Has product in the revenue, though growth stagnant. Fascinating peek into the market of innovation in law enforcement.

Financials (VRB)

|1. Fundraising Target? |$25m|
|2. Fundraised So Far?|$769k|
|3. Pre-Money Valuation?|$447m|
|4. Previous Year's Annual Revenue |$1.6m|
|5. Previous Year's Annual Burn |~$9.1m|

Offering Circular

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

Criteria Yes/No
1. A startup that is based in SV? Yes: Mountain View, CA
2. Has at least 2 founders? Yes: Five c-suite
3. Has product in the market? Yes
4. 6 months of continuous user growth or 6 months of revenue? No: check out 2020 vs 2019 rev, no growth.
5. Notable investors? No
6. Post-funding, will have 18 months of runway? No: Lacking a deadline but would need to raise ~$18m to have 18 months of runway, and not even at $1m right now.

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

Question Score Notes
1. Engineering? 4 Seems like awesome technology
2. Timing? 3 Good time for automation, uncertain if good time for robot cops.
3. Monopoly? 2 I've heard of this company but don't know anyone who owns one, that said, I'm not the market?
4. People? 3 Seems good.
5. Distribution? 2 My biggest fear.
6. Durability? 3 Good, as they said, Machine-as-a-Service, like Graze.
7. Secret? 2 In the next 3-5 years you're going to the security industry suddenly have the appetite for thousands of robots to help keep the peace.

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

  1. B2B sales
  2. Reduce CAC
  3. Reduce COGS

What the Risks Are

  1. Law Enforcement = Luddites
  2. How to Scale Software/Data
  3. Bikeshare in Rome

Bonus Muhan's Notes

Check out this link about law enforcement facing a very real, mundane business challenge of affording the one-time costs (bodycams) then nixing the program because they aren't cloud ready:

Why some police departments are dropping their body camera programs
Body cameras are praised as a key police accountability tool. Some departments say they’re too expensive to use.
“The easy part is buying the body cameras and issuing them to the officers. They are not that expensive,” Jim Pasco, executive director at the National Fraternal Order of Police, told the Post. “But storing all the data that they collect — that cost is extraordinary. The smaller the department, the tougher it tends to be for them.”


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