Deal Abstract

Arlan Hamilton is using her venture investing experience to spin up her own fractional operations outsourcing firm.

Financials (VRB)

Question	Notes
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

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: 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

Source

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

Question	Score	Notes
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.

Updates

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

Test if original thesis still applies

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So, did I invest?

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