Deal Abstract

Another player in the cash-for-home-equity (as opposed to cash-for-debt) play. Good valuation and thesis, but ambiguous differentiation. From what I can tell, company only generated $20k in revenue and has only raised 5 months of runway.

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The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: Newport Beach, CA
2. Has at least 2 founders Yes: Yes
3. Has product in the market Yes: Started accepting applications in October 2019
4. 6 months of continuous user growth or 6 months of revenue.Yes: Rev for 2019 was $8k, has generated $20k in 2020.
5. Notable investors?No
6. Post-funding, will have 18 months of runway No: Burned $414k in 2019, only raised $151k.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • Bad: Not sure how this is 10x better than Hometap, Divvy, Unison, EasyKnock, Ribbon, or Figure. Competitor source here.
  2. The Timing question
    • Good: Lots of competition means this is a thesis multiple people are hunting. Divvy in particular raised $43m from a16z and partners.
  3. The monopoly question
    • Bad: Look at the existence of these other competitors and you can tell this is going to be a market with lots of players. That said, not horrible.
  4. The people question: 
    • Fine: Team seems fine but nothing too stand out.
  5. The distribution question
    • Fine: marketing to consumers but no advantage on distribution.
  6. The durability question
    • Good: If business is built, definitely defensible with relationships to lenders and consumers.
  7. *What is the hopeful secret?: 
    • Uncertain what the secret is compared to competitors.

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

  1. N/A

What the Risks Are

  1. N/A

Muhan’s Bonus Notes

Financials (References)

  • Current Fundraised: $151k
  • Valuation: ~$8MM


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