Why Investing

  1. 天时地利人和—Feasible problem, with demonstration traction, backed by the investment arms of their customers and worked on by a team with deep complementary skills.
  2. Starting in a “niche” and defensible application: B2B sales and helping airlines begin to think about email as an interface rather than just a messaging service.
  3. Critical investments from JetBlue and Elal Airlines’ venture arms.

Master Checklist

1. Syndicate lead has >5 years investing and >1 unicorn investmentFail
2. A startup that is based in SVFail (New York, NY)
3. Has at least 2 founders Pass 
4. Has product in the market Pass
5. 6 months of continuous user growth or revenue.Pass: Revenue grew from $73k to $84k from 2017 to 2018
6. Notable investors?Pass: JetBlue Technology Ventures
7. Post-funding, will have 18 months of runway Pass: Raised $474k, expenses in 2017 were $82k
8. Proprietary technology?Pass: as proprietary as anything in digital property can be
9. Network effects?
10. Economies of scale?
11. Great branding?
Pass: (Huzzah for UX cofounder)

Seven Questions

  1. The Engineering question
    • Good: MovableInk in NYC has great technology that allows for email to dynamically update, but most emails I get do not have this yet. Perhaps there’s an adoption question where most people still think about writing and delivering e-mails like traditional mail, instead of dynamic (dynamic novels, dynamic contracts, etc.)
  2. The Timing question
    • Good: 2018 is a good time to build software business. Aside from that, airlines are getting killed by their thin-margin business. 
  3. The monopoly question
    • Good: helping airlines apply this technology, then applying it across other verticals, is a winning strategy.
  4. The people question: 
    • Good: With a team of three, young Asian men who occupy the “hacker, hustler, hipster” paradigm (programmer, salesman, and designer) there’s not much to dislike. 
  5. The distribution question
    • Good: B2B sales is super hard. But with money from JetBlue and ELAL, there’s incentives for the airlines to help them get more customers.
  6. The durability question
    • Good: super hard sales means very defensible.
  7. The secret question: 
    • Bad (by default): perhaps that airlines are an underutilized network for this application of dynamic email. With money from JetBlue and ELAL, if these companies start using dynamic emails to make money on upsells, that’ll be a heck of a secret.

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

  1. Airlines recognize a dramatically better UI/UX for checking in and make more money.
  2. Check-in service in email becomes the paradigm instead of going to an online website to do so.
  3. After dominating the airline check-in application, SeatAssignMate is able to rapidly identify and expand to other applications of email-as-app. 

What the Risks Are

  1. Competition: will a company like SendGrid (now owned by Twilio,) Mandrill (Mailchimp,) or MovableInk move faster and take the product to market better?
  2. Technology: not sure how defensible/legitimate digital patents and protections are. 


01/05/22: Raising a new round at 13mm valuation

Email software enabling users to browse, select, and make purchases without leaving their inbox
Revenue mostly stagnant in the last two years.
This round represents a down round.

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

Test if original thesis still applies