Arlan Hamilton is using her venture investing experience to spin up her own fractional operations outsourcing firm.
|1. Fundraising Target?||$5000000|
|2. Fundraised So Far?||$219078|
|3. Pre-Money Valuation?||$25000000|
|4. Previous Year's Annual Revenue||$39176|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$-419617|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: Los Angeles, CA|
|2. Has at least 2 founders?||False: Two|
|3. Has product in the market?||True: Revenue generating|
|4. 6 months of continuous user growth or 6 months of revenue?||True: Generating revenue, $39k*4=$156k booked in 2021 in 4 months.|
|5. Notable investors?||True: Precursor and Backstage|
|6. Post-funding, will have 18 months of runway?||True: Needs about $600k|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|1. Engineering?||2||Not much of an engineering innovation so much as a qualified pipeline of talent|
|2. Timing?||3||Pretty good timing with ops talent being laid off|
|3. Monopoly?||1||Very small percentage of small market, lots to grow|
|4. People?||2||Right person, but my concern is that right now it's just one person who is also running a fund|
|5. Distribution?||3||Has good distribution through the companies that Backstage is funding|
|6. Durability?||2||Not sure why another firm couldn't do this|
|7. Secret?||2||Backstage's combination of W2 perks, access to customer pipeline, and the timing of layoffs means this is demand for ops talent is going to grow at a venture speed|
What has to go right for the startup to return money on investment:
1. Demand for fractional ops people goes venture speed; 2. High need for customers and runners to find new clients (like Airbnb); 3. Business grows to $1bn off of fractional ops people alone
What the Risks Are
1. Take rate not very high and only off one-time transactions; 2. Where is the stickiness of the product; 3. Is this a main company or a side project?
Bonus Muhan's Notes
The more I read about Arlan, the more I realize there's more material I need to review to understand her story. This includes her book 'It's About Damn Time', and her season on 'Startup' the podcast.
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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