Deal Abstract

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

Financials (VRB)

|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


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Review these deal memos every time the startup raises a new round

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