Deal Abstract
Female entrepreneur brings back Buckwheat superfood culture from Australia to the U.S. Working with the Hatchery in Chicago.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$250000|
|2. Fundraised So Far?|$56000|
|3. Pre-Money Valuation?|$4000000|
|4. Previous Year's Annual Revenue |$25522|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-46919|
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: Trout Valley, IL |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: Revenue generating |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Revenue increased from 2018 to 2019 |
| 5. Notable investors? | True: Sort of: https://thehatcherychicago.org/ |
| 6. Post-funding, will have 18 months of runway? | True: Call it $75k to have 1.5 years, very close |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 1 | Not an engineering innovation, just application of existing technology |
| 2. Timing? | 1 | Not sure why buck superfoods at this point is about to be venture backable |
| 3. Monopoly? | 1 | Don't know anyone eating it |
| 4. People? | 2 | Good founder but would have preferred more experience in food innovation |
| 5. Distribution? | 1 | eCommerce is nice but getting into the retailers will be a pain |
| 6. Durability? | 1 | Not sure what is durable about this |
| 7. Secret? | 2 | Starting with buck foods is a beachhead for building a super food company |
What has to go right for the startup to return money on investment:
1. Get into retailers; 2. sell sell sell; 3. expand into other superfoods and not just be a one product company
What the Risks Are
1. Food doesn't scale fast; 2. Concerned about defensibility; 3. Ongoing R&D costs of new superfood procurement
Bonus Muhan's Notes
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
So, did I invest?
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