SelfDecode Deal Memo (Closing Date: 2022-02-28)

Muhan Zhang -

Deal Abstract

Invest in SelfDecode: AI platform that provides personalised health recommendations based on DNA, labs and environment. | Wefunder
AI platform that provides personalised health recommendations based on DNA, labs and environment.
SelfDecode on Wefunder

Very early stage DNA and environment genetic sequencing company (baby 23andme) is raising money to make a more complete genetic sequencing service.

Financials (VRB)

Question Notes
1. Fundraising Target? $1273722
2. Fundraised So Far? $2000000
3. Pre-Money Valuation? $34900000
4. Previous Year's Annual Revenue $1436971
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-499746
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
4. 6 months of continuous user growth or 6 months of revenue? True: Revenue grew by $200k in a year
5. Notable investors? False: None recognized
6. Post-funding, will have 18 months of runway? True: Just needs $750k

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

Question Score Notes
1. Engineering? 2 Seems like interesting technology, but decoding DNA in such a comprehensive way seems ambitious
2. Timing? 2 Technology becoming cheaper but I wonder about demand
3. Monopoly? 2 Grew to 2.7m in revenue in 2021, solid
4. People? 2 Team seems good
5. Distribution? 2 Online ordering and test results online
6. Durability? 2 If they can build it, the data is definitely defensible
7. Secret? 2 The demand for a 23andme informed by environmental development factors is large

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

1. Results have to be both specific and accurate; 2. Steal market share away from people doing DNA testing; 3. Start to give verifiably actionable preventative input

What the Risks Are

1. 23andme took 11 years to become worth 3.5bn, and that's with seed funding from the cofounder of Google; 2. How accurate can the environment get?; 3. How hard will it be for 23andme to copy the other features?

Bonus Muhan's Notes

Genetic testing company 23andMe rises in first trade after Richard Branson SPAC merger
23andMe, a genetic testing start-up that pioneered personalized medicine as a consumer business, trades under ticker “ME” in a deal with Richard Branson’s SPAC.
CNBCEric Rosenbaum

Updates

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