Deal Abstract

AR/VR-AI apparel eCommerce SaaS solution reducing returns and increasing sales

AI company wants to help you see what a piece of clothing looks like on you before you buy. Pretty ambitious stuff, indie version of Amazon Look.

Financials (VRB)

Question Notes
1. Fundraising Target? $1500000
2. Fundraised So Far? $215300
3. Pre-Money Valuation? $15000000
4. Previous Year's Annual Revenue $0
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-1387330

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: Los Angeles, CA
2. Has at least 2 founders? True: Two
3. Has product in the market? True: Deployed at a top-10 (USA) retailer's select site (Target Corp)
4. 6 months of continuous user growth or 6 months of revenue? False: No revenue
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? False: Would need 1.95m of burn

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

Question Score Notes
1. Engineering? 4 Seriously impressive engineering between body scan, CAD to scan, fitting and draping, and visualization of fit
2. Timing? 3 Very good time to be optimizing e-commerce given COVID
3. Monopoly? 1 Not many people using nor revenue
4. People? 2 Strong team of nerds but don't see them with retail/sales experience
5. Distribution? 2 This is my biggest concern, getting people to adopt this product requires B2B connections. That said, they already piloted with Target, which helps.
6. Durability? 5 If this company can get adoption, as the model gets more data about fit, CAD, and return rates, it will only get better.
7. Secret? 3 AI visualization of clothing fits will help customers buy clothing more confidently and scalably in the world of e-commerce

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

1. Monetize; 2. Algorithm gets consistently better; 3. Balance helping customers keep data while aggregating intelligence from data

What the Risks Are

1. Business model; 2. Feature not a business; 3. Distribution risk selling to large apparel companies

Bonus Muhan's Notes

Need to learn more about business model


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