Deal Abstract

https://wefunder.com/regrained

Innovative food company wants to take leftover grain from making beer and upcycling it into food ingredients. Business hinges on a critical patent-protected factor of being able to maintain a competitive business if vendors start chilling more for the used grain flour.

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The 6 Calacanis Characteristics (91 161 18)

Check	Yes/No
1. A startup that is based in SV	Yes: Berkeley, CA
2. Has at least 2 founders	Yes (2)
3. Has product in the market	Yes
4. 6 months of continuous user growth or 6 months of revenue.	Yes: 2018 revenue to 2019 revenue increased from $238k to $359k.
5. Notable investors?	Yes: Molson Coors (yes, like the beer,) and Barilla (yes, like the pasta.)
6. Post-funding, will have 18 months of runway	No: $1.664M burn for 2019 and only raising $535k, so 4 months of runway. Somewhat concerning. (Importantly, also allegedly raised $1.5MM in private money, so $535k is only public.)

The 7 Thiel Questions (ETMPDDS)

The Engineering question:
- Good, Maybe: Easily more than 10x versus not recycling anything, but not confident it’s 10x better than normal flour.
The Timing question:
- Good: Right time for virtue brands.
The monopoly question:
- Bad: Can’t see why other companies wouldn’t figure out a way to make other cooking ingredients from beer waste.
The people question:
- Good: Team is good.
The distribution question:
- Bad: Needs to get large shelf space for selling produce through commercial supermrkets.
The durability question:
- Bad: Unconvinced other companies can’t product ‘patented’ technology to process flour.
*What is the hopeful secret?:
- Adopting of remnant ingredients will take place ousted via culminate groups.

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

Clarify What The Business is In
Leverage investors and pro relationship
Customer service has to be excellent to address questions

What the Risks Are

Technology not that novel/not defensible
Business gets distracted behind CPG and vendor partner status.
Product is not that good/cheaper than normal flour, so this is a vitamin not a painkiller.

Muhan’s Bonus Notes

Overall fine business, but I don’t invest in food.

Financials (References)

Current Fundraised: $261k
Valuation: ~$14.5MM

Updates

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

Test if original thesis still applies

Notice trends in how you think

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https://wefunder.com/regrained/ask

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