Deal Abstract

Innovation in the cycling backpack/apparel market. Founder has bootstrapped a lifestyle brand and raising capital to grow.

Financials (VRB)

|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$250000|
|2. Fundraised So Far?|$40537|
|3. Pre-Money Valuation?|$3500000|
|4. Previous Year's Annual Revenue |$217841|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-43009|

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?	False: New York, NY
2. Has at least 2 founders?	False: Two
3. Has product in the market?	True: Revenue generating
4. 6 months of continuous user growth or 6 months of revenue?	False: Revenue decreased from 2018 to 2019
5. Notable investors?	False: Bootstrapped
6. Post-funding, will have 18 months of runway?	True: $43k annual burn, at 18 months would be ~$75k

Source

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

Question	Score	Notes
1. Engineering?	2	Unique bicycle backpack innovation, as a cyclist, I wonder how this plays with bikeshare
2. Timing?	1	Cycling should increase but uncertain if venture backable
3. Monopoly?	1	Don't know anyone with one of these bags
4. People?	3	Good people to be building this product
5. Distribution?	3	Seem to have really figured out distribution
6. Durability?	2	Lifestyle brand, fairly defensible
7. Secret?	2	The population of city commuting cyclist is about to boom in venture style

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

1. Partner with bikeshares at some point; 2. Enter into cyclist apparel and other accessories; 3. Keep innovating new products

What the Risks Are

1. Mass market vs high end product; 2. Revenue did not increase 2018 to 2019, concerned if this remains the case; 3. Cycling remains a niche market and doesn't go mainstream

Bonus Muhan's Notes

Updates

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

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