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 SV||No: 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)
- The Engineering question:
- Bad: Not sure how this is 10x better than Hometap, Divvy, Unison, EasyKnock, Ribbon, or Figure. Competitor source here.
- 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.
- 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.
- The people question:
- Fine: Team seems fine but nothing too stand out.
- The distribution question:
- Fine: marketing to consumers but no advantage on distribution.
- The durability question:
- Good: If business is built, definitely defensible with relationships to lenders and consumers.
- *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:
What the Risks Are
Muhan’s Bonus Notes
- Current Fundraised: $151k
- Valuation: ~$8MM
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.
Review these deal memos every time the startup raises a new round
Test if original thesis still applies
Notice trends in how you think
So, did I invest?Click here to find out.
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