Deal Abstract
NYC Opportunity Fund · NYC Opportunity Fun... — Republic
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James Nelson NYC Opportunity Fund
$50m investment fund focusing on small/mid-size commercial and residential properties in NYC.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $50000000 |
| 2. Fundraised So Far? | $0 |
| 3. Pre-Money Valuation? | $0 |
| 4. Previous Year's Annual Revenue | $0 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$0 |
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: New York, NY |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: NYC real estate |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: From 2020 to 2021 definitely |
| 5. Notable investors? | False: No one I recognize |
| 6. Post-funding, will have 18 months of runway? | False: No burn really, just an investment fund |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 1 | Not sure why this is better than other funds |
| 2. Timing? | 2 | Arguing that COVID would make this time good |
| 3. Monopoly? | 1 | Not relevant |
| 4. People? | 2 | Fund manager seems fine |
| 5. Distribution? | 1 | No product, investment fund |
| 6. Durability? | 5 | Real estate in Manhattan is as durable as it gets |
| 7. Secret? | 1 | Investing in NYC after the pandemic is a good timing |
What has to go right for the startup to return money on investment:
Real estate in NYC has nearly no risk, the problem is will the returns be worth writing home about.
What the Risks Are
1. NYC is very expensive; 2. No value add; 3. Conditions for making money are very conditional
Bonus Muhan's Notes
Returns may be tepid on this investment, but risk is also low.
Updates
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Test if original thesis still applies
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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.