Father daughter Latino family is teaming up to make an English/Spanish interactive reading adventure app.
|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|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|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|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|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
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.
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