Deal Abstract

Invest in LUPii
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Emerging food brand centered around Lupini protein. Revenue generating but can they take it to the next level?

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $155080
3. Pre-Money Valuation? $6000000
4. Previous Year's Annual Revenue $174141
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-584335
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? False: Brooklyn, NY
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: Grew revenue substantially
5. Notable investors? False: No one I know
6. Post-funding, will have 18 months of runway? True: But needs to raise full round
Source

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

Question Score Notes
1. Engineering? 3 Lupini protein
2. Timing? 3 Good time for health conscious brands
3. Monopoly? 2 I am quite enthusiastic about plant based protein but have never heard of this brand
4. People? 3 Good founders
5. Distribution? 2 Online and retail stores, nothing proprietary
6. Durability? 2 No moat or subscription, also what's stopping another company from using Lupini?
7. Secret? 2 Lupini based protein products are enough to build a venture sized business

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

1. Grow market share for Lupini protein; 2. While reining in costs; 3. and build something proprietary like a supply chain or brand

What the Risks Are

1. Food isn't venture backable; 2. Lupini beans are proprietary; 3. Distribution is still choke-held by grocery stores

Bonus Muhan's Notes

Hope to try one in my local grocery store.

Updates

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

Test if original thesis still applies

So, did I invest?

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