Deal Abstract

Invest in Podetize
Republic is a startup investing platform where you can invest as little as $10 in impactful startups
Republic

Podetize wants to take its bootstrapped business to venture speed by building a Google Adwords marketplace for podcasts to compete against Spotify Anchor and co.

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $54661
3. Pre-Money Valuation? $7500000
4. Previous Year's Annual Revenue $1003806
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-183139
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: Foothill Ranch, CA (SoCal)
2. Has at least 2 founders? True: Two
3. Has product in the market? True: Revenue generating
4. 6 months of continuous user growth or 6 months of revenue? True: Grew from $600k to $1m
5. Notable investors? False: No one known
6. Post-funding, will have 18 months of runway? True: Needs $250k to have 18 months
Source

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

Question Score Notes
1. Engineering? 2 New platform, but don't really understand what's 10x better about the platform for podcasts (as opposed to Anchor, which I used for First Money In and Spotify/Apple Podcast)
2. Timing? 2 Podcasts are definitely still relevant, though it feels a little late to this game
3. Monopoly? 2 Solid market share for a small company
4. People? 3 Strong entrepreneurs, but they seem more lifestyle entrepreneurs than venture backable
5. Distribution? 3 Has built up a solid client base and podcast base
6. Durability? 2 I've never heard of Podetize and don't know why Spotify/Anchor can't eat their lunch
7. Secret? 2 Building a Google Adwords-seque self serve marketing platform for podcast advertisements is going to create a large size exit to Google/Amazon/etc.

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

1. Revenue needs to grow up at multiples, not just at percentages; 2. Podetize has to attract more advertisers; 3. Spotify and co don't open up an option to sell ads on smaller podcasts

What the Risks Are

1. Incumbents; 2. Growth has been slow from 2019 to 2020; 3. Platform doesn't find venture sized demand

Bonus Muhan's Notes

Funded with a $750k EIDL SBA loan, which is very cool

Updates

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

Test if original thesis still applies

So, did I invest?

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.