Deal Abstract

Twilio powered SMS SaaS for SMBs. Has a beta product, but no revenue yet. One founder, very early stage ($3m valuation.) Sorry not sorry for all the acronyms.

Financials (VRB)

|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$107000|
|2. Fundraised So Far?|$51357|
|3. Pre-Money Valuation?|$3000000|
|4. Previous Year's Annual Revenue |$0|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$0|

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: Lehi, UT
2. Has at least 2 founders?	False: Two
3. Has product in the market?	False: 20 beta users and paying but not fully in the market
4. 6 months of continuous user growth or 6 months of revenue?	False: Beta users payback period but no revenue
5. Notable investors?	False: Need to ask who the 3 angels are and if they're working with NextView
6. Post-funding, will have 18 months of runway?	True: No burn right now, so by default yes

Source

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

Question	Score	Notes
1. Engineering?	4	Having worked with contractors (commercial version of home service provider, not exactly the same but similar) can confirm everyone uses SMS and the end-to-end user experience is bad
2. Timing?	3	What a time to build B2B SaaS
3. Monopoly?	1	20 beta customers, not bad but not remarkable
4. People?	2	Founder has been thinking about these problems for a long time, but doesn't have a full-time team yet. That said, very early.
5. Distribution?	3	Founder has experience marketing SMS solutions to SMB.
6. Durability?	4	SMS based CRM for SMB, very defensible
7. Secret?	3	SMBs use SMS for customer communication already, so building a SMS CRM for SMB is the schelp heavy untapped opportunity.

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

1. Scale a large sales team that sells to lots of SMBs, 2. Great customer service as these business operators are probably their own CEO/COO/CTO/CFO etc, 3. Build fantastic integrations and become the Shopify for SMBs vs the Thumbtack (one empowers while the other commoditizes)

What the Risks Are

1. Pre-revenue, pre-public launch of product, 2. Team risk, only one person on the team full-time right now, 3. SMBs are luddites as an aggregate market and therefore building a sales team to convert them is cost prohibitive

Bonus Muhan's Notes

Check out https://www.avochato.com/ ($5M Series A) as a benchmark for comps. Met the founder and observed strong SMB traction there. Given the price point and target market, I’d expect a pretty turnkey product and self-serve onboarding process here.
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Updates

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.

05/03/21, Relay cancelled raise

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