Deal Abstract

Managed marketplace for advertisers to find influencers who will repost their content. Generated $125k in revenue in Q4, tripling revenue in a quarter. Has some tricky issues to resolve whether serving the most inexpensive market is a sustainable business, and whether the value hypothesis of streamlining content doesn’t eviscerate influencer value add.

Shout out to reader John for forwarding me the deal!

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The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: Santa Monica, CA
2. Has at least 2 founders Yes: No (Has four in C-Suite but only CEO has meaningful voting power)
3. Has product in the market Yes
4. 6 months of continuous user growth or 6 months of revenue.Yes: 2019Q4 was $10k, 2020Q1 was $31.5k, 2020Q2 was $125k.
5. Notable investors?No: Looked through ExpertDojo and Dzhel Ventures and don’t recognize any portfolio companies or the funds founders.
6. Post-funding, will have 18 months of runway No: 2019 burn was $706k, targeting $1MM in funding so coming in right around 17 months of runway.
400% revenue growth from Q1-Q2, 1000% user growth from Q1-Q2, Grew from 4 to 16 clients in 2020

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • Good: assuming that businesses spending $3k-$5k a year on advertising don’t have any way of getting influencers at scale with accountability, this product is definitely better than the alternative.
  2. The Timing question
    • Good: Ad-pocalypse and budget-strapped influencers means there should be more demand on both sides of the marketplace.
  3. The monopoly question
    • Good: Network effects for micro-influencers and micro-brands spending money. Can scale quickly.
  4. The people question: 
    • Fine: Team seems fine. CRO has particularly relevant experience, CEO has executive experience with online companies and e-commerce.
  5. The distribution question
    • Good: They’re a marketing company trying to get advertisers and influencers to

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