Deal Abstract

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 |
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 |
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
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