Deal Abstract
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As your friends have pitched you, there's finally an app that aggregates all the prices from all the rideshares.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $535000 |
| 2. Fundraised So Far? | $435794 |
| 3. Pre-Money Valuation? | $19500000 |
| 4. Previous Year's Annual Revenue | $0 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-925678 |
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: Has product in market |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Really strong user base but no revenue |
| 5. Notable investors? | True: Plug and Play Center |
| 6. Post-funding, will have 18 months of runway? | False: Burned a lot of money |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 1 | This is aggregating other rideshare app value, no value creation independently |
| 2. Timing? | 1 | Not sure why now is the right time for this business |
| 3. Monopoly? | 3 | Strong users |
| 4. People? | 2 | Good work experience but no background in rideshare startups |
| 5. Distribution? | 4 | Really strong distribution surprisingly |
| 6. Durability? | 2 | What's to stop another aggregator from popping up? |
| 7. Secret? | 1 | Creating an aggregator for rideshare is a good business model |
What has to go right for the startup to return money on investment:
1. Monetize; 2. Continue sustainable CAC; 3. Create value in addition to just aggregating it
What the Risks Are
1. No business model; 2. No independent value creation; 3. Google Maps already has Uber/Lyft estimates
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?
Click here to find out.Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.