Deal

https://www.seedinvest.com/sapientx/seed/

Decision

Yes.

Why Investing

  1. White label AI solution seems inevitable. Just like banks collided together to make Zelle to combat Venmo, it makes sense that automakers worldwide would not be thrilled at Google, Apple, and Amazon holding such stark leadership positions in AI.
  2. Valuation is right ($5MM, needs to be below $10MM), is a SaaS business. Has a product, early revenue, and Mitsubishi contract going on.
  3. Chief scientist Bruce Wilcox seems like a legitimate heavy weight. 

Calacanis

CheckPass/Fail
1. Ssyndicate lead has >5 years investing and >1 unicorn investmentFail
2. A startup that is based in SVPass
3. Has at least 2 founders Pass 
4. Has product in the market Pass: Yes, $54k in revenue 2017
5. 6 months of continuous user growth or revenue.Pass: Revenue grew from $1k to $54k in 2016 to 2017
6. Notable investors?Fail: None that are easily identifiable.
7. Post-funding, will have 18 months of runway Pass: Yes, Raised $401k, 2017 expenses were $146k.
8. Proprietary technology?Pass
9. Network effects?
Pass
10. Economies of scale?
Pass
11. Great branding?
Fail (by default)

Thiel

  1. The Engineering question
    • Bad: hard to imagine that this will be better than Google, Amazon, or Apple in the near future. 
  2. The Timing question
    • Bad (by default): not sure if this is a good time, therefore no points on this.
  3. The monopoly question
    • Good: as with the Zelle analogy, if this is truly adopted wide by card manufacturers for white label, then this could absolutely be the last non-tech affiliated AI virtual assistant solution.  
  4. The people question: 
    • Bad (by default): lots of things relying on CEO and scientist. CTO is interim. 


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