Deal Abstract

Invest in Linen
Republic is a startup investing platform where you can invest as little as $10 in impactful startups
Republic

Mint.com/Acorn for crypto. Pre-revenue with a pretty app, but will it be able to overcome BlockFi/Coinbase/Voyager's various network effects?

Financials (VRB)

Question Notes
1. Fundraising Target? $4900000
2. Fundraised So Far? $2583406
3. Pre-Money Valuation? $22000000
4. Previous Year's Annual Revenue $0
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-428144
Source

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

Criteria Yes/No
1. A startup that is based in SV? True: San Francisco, CA
2. Has at least 2 founders? True: Two
3. Has product in the market? True: In the App Store, only 62 reviews
4. 6 months of continuous user growth or 6 months of revenue? False: No revenue
5. Notable investors? True: Coinbase ventures
6. Post-funding, will have 18 months of runway? True: Already has 5 years of burn at present, if full raise 10 years
Source

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

Question Score Notes
1. Engineering? 2 More friendly UI/UX but not fundamentally better tech
2. Timing? 2 BlockFi, Voyager, Kraken, Robinhood Crypto, Coinbase of course...
3. Monopoly? 1 Very few users
4. People? 2 Fine team but only having these two cofounders at this valuation and capital burned makes me wonder if they can cross the chasm
5. Distribution? 1 Haven't heard of this despite running a paid community of investors many of whom love crypto
6. Durability? 2 Like Coinbase, wants to become financial platform
7. Secret? 2 Doing something like Mint.com/Acorn for crypto could get a big market. While Mint and Acorn are both fine businesses, I don't find them to be venture backable.

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

1. Get more users; 2. Monetize; 3. Develop a moat

What the Risks Are

1. Too late to be building this compared to BlockFi/Voyager/etc., 2. No business model that works for venture sized returns; 3. No moat/what makes people use Linen over BlockFi and such

Bonus Muhan's Notes

Super cool to see a Coinbase ventures company. Makes one wonder what the next wave of investment will look like.

Updates

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Review these deal memos every time the startup raises a new round

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So, did I invest?

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.