Deal Abstract

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

Building better tools for automatically paying off debt and other fintech needs.

Financials (VRB)

Question Notes
1. Fundraising Target? $1000000
2. Fundraised So Far? $150081
3. Pre-Money Valuation? $12000000
4. Previous Year's Annual Revenue $252585
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-245402
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: Atlanta, GA
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? False: Revenue dropped from 2019 to 2020
5. Notable investors? True: I recognize RIse of the Rest (Steve Case) and maybe Village Capital?
6. Post-funding, will have 18 months of runway? True: If they can raise the full $360k round then they'll have the full 18 months

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

Question Score Notes
1. Engineering? 2 Nice UI/UX but I wonder if it's 10x better than existing solutions
2. Timing? 2 People are in a lot of debt, but why would this app be poised to explode now?
3. Monopoly? 2 Good traction but very modest revenue
4. People? 3 People seem good
5. Distribution? 2 Already got a lot of users and helped paid off $20m in debts
6. Durability? 1 This is my biggest concern, what's to prevent companies that hold debt from making this feature into their SaaS
7. Secret? 1 Helping people pay off debt through basic financial tools is going to be a billion dollar company at this time

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

1. Go up market and not just serve low income customers paying off debt; 2. Help users make money/create more value and capture value; 3. Build more services B2B for debt owners

What the Risks Are

1. Feature not a company; 2. Fairly replicable technology; 3. Serving a low income population

Bonus Muhan's Notes

Great mission, but not seeing how this is going to be a tremendously large business. Compare to FloatMe.

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.