Deal Abstract

https://www.investinlegion.com/ (legion.is is the company page)

Investment company for SaaS businesses. Team is copy paste from Hello Bar. Investment thesis is acquiring bootstrapped SaaS businesses with good product, poor marketing, sub-$1.5MM in ARR and too slow for traditional venture capital. Analysis requested by a reader (yes, I take requests at mail@muhanzhang.com!)

Shoutout to B. M. for the tip!

The 6 Calacanis Characteristics (91 161 18)

CheckPass/Fail
1. A startup that is based in SVFail: San Diego, CA
2. Has at least 2 founders Pass (2)
3. Has product in the market Fail: no product.
4. 6 months of continuous user growth or 6 months of revenue.Fail: no metrics.
5. Notable investors?Fail: no sharing of other investors.
6. Post-funding, will have 18 months of runway Irrelevant/most likely: not a startup, so this metric is not relevant.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • N/A: No technology.
  2. The Timing question
    • Good: Can see COVID being a great time to acquire cheaper SaaS businesses.
  3. The monopoly question
    • Meh: there are probably some economies of scale, but nothing groundbreaking.
  4. The people question: 
    • OK: team seems to make sense, but lack of materials not promising.
  5. The distribution question
    • N/A: not a startup so not relevant.
  6. The durability question
    • Meh: good that they’re buying good businesses with solid ARR, but no guarantee that those businesses will last a long time.
  7. *What is the hopeful secret?: 
    • This team has unique dealflow to profitable, bootstrapped SaaS businesses through their connections at HelloBar and Neil Patel Digital Agency, and that the existing funders (angel, venture, and traditional bank) are leaving money on the table by not analyzing and funding these businesses.

What has to go right for the


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