Deal Abstract

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

Father daughter Latino family is teaming up to make an English/Spanish interactive reading adventure app.

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $91433
3. Pre-Money Valuation? $5000000
4. Previous Year's Annual Revenue $3370
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-25397
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 Jose, CA
2. Has at least 2 founders? False: Two
3. Has product in the market? True:
4. 6 months of continuous user growth or 6 months of revenue? False: 2018 to 2019 was nominal growth, we'll see about this 2020 revenue
5. Notable investors? False: No one I know from the LatAm world
6. Post-funding, will have 18 months of runway? False: Would need $400k for that type of runway
Source

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

Question Score Notes
1. Engineering? 1 No novel technology
2. Timing? 1 Not sure why now is the right time to build an interactive digital book
3. Monopoly? 2 Never heard of it, but to be fair, has 1m downloads
4. People? 2 Father, daughter, the pair have no previous experience in this space
5. Distribution? 2 All app store but no unfair free advantages
6. Durability? 2 I do wonder why Amazon Kindle/Audible wouldn't do something similar
7. Secret? 1 Interactive engagement is the lever that will get people reading more

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

1. Thesis has to be right; 2. Monetization has to go according to scale; 3. Licensing rights with authors and establish true partnerships with authors

What the Risks Are

1. Vitamin not a painkiller; 2. Monetization very modest; 3. Nothing defensible

Bonus Muhan's Notes

Updates

This is where I’ll post


Want to read the whole post?


You don't have access to this post on Startup Investing for All by Muhan Zhang at the moment, but if you upgrade your account you'll be able to see the whole thing, including comments, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.