Deal Abstract

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

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

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


So, did I invest?

Click here to find out.

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