Deal Abstract
SeedInvest
Social network for weed consumers, producers, vendors, and industry. Is the future not just one LinkedIn but many different LinkedIns for different verticals?
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1500000 |
| 2. Fundraised So Far? | $544980 |
| 3. Pre-Money Valuation? | $8000000 |
| 4. Previous Year's Annual Revenue | $111012 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-657803 |
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: Denver, CO |
| 2. Has at least 2 founders? | True: Two |
| 3. Has product in the market? | True: Revenue generating |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Revenue grew from $6k to $111k, 2018 to 2019 |
| 5. Notable investors? | False: No one I recognize |
| 6. Post-funding, will have 18 months of runway? | True: Will need roughly $900k for 18 months runway |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 1 | Looks like a specialized version of LinkedIn |
| 2. Timing? | 1 | Not sure why having a specialized version of LinkedIn right now is advantageous |
| 3. Monopoly? | 3 | Strong traction in a very niche market |
| 4. People? | 2 | Good executive team but no one with social network business experience |
| 5. Distribution? | 3 | Strong traction implies good distribution |
| 6. Durability? | 2 | If weed gets completely destigmatized, does that mean LinkedIn eats Leafwire's lunch? |
| 7. Secret? | 1 | Leafwire is going to provide cover for a taboo industry of marajuana and ultimately becomes the LinkedIn for all ugly jobs that don't live on LinkedIn |
What has to go right for the startup to return money on investment:
1. Reach dominant position in marajuana; 2. Expand beyond marajuana; 3. Clarify what the business is.
What the Risks Are
1. This business is destined to sunset as ugly jobs become increasingly more accepted e.g. weed
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