Deal Abstract

Invest in Snailz
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Husband/wife duo are teaming up to build a marketplace and business management platform for nail salonz. B2B SaaS marketplace, but can they scale fast enough to be venture backable?

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $193931
3. Pre-Money Valuation? $10000000
4. Previous Year's Annual Revenue $69932
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-889968

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: New York, NY
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: Revenue more than doubled from $28k to $69k
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: If they raised $1mm, but it doesn't look likely at present

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

Question Score Notes
1. Engineering? 2 Better than nothing, but is it 10x better than Booksy or HellaBella?
2. Timing? 2 Good time to make marketplaces
3. Monopoly? 4 Credit where credit is due, has gone deep on Manhattan and has 20% of market
4. People? 3 Husband and wife together, harder to get incentives more aligned :)
5. Distribution? 2 No clear advantage to onboarding new customers, though the quantity is impressive
6. Durability? 3 If they can build it, I could see this being the Grubhub of nails for the East Coast (Grubhub vs Eat24 vs the reset of the food wars)
7. Secret? 2 Millennial beauty customers are expecting a digital first booking and reservation system, and Snailz is going to build that marketplace

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

1. Control spend and scale more efficiently, I believe it's at 176k in revenue for 2020 but need to see costs; 2. Grow more rapidly, the business has been around since June 2017, has 350 salons for 1.3m in bookings (20% of Manhattan network,) 3. Take learnings from Manhattan expertise and bundle it up in a faster go to market strategy

What the Risks Are

1. Fragmented marketplace, Booksy is already tackling this market and has Series C funding; 2. Adoption speed not fast, uncertain how ready nail salons are in adopting SaaS (though to be fair, as owners turn younger, I'm sure this will change,) 3. Pricing structure, 13% is not cheap for a small business and services industry at this level already have a lot of costs

Bonus Muhan's Notes

Very cool to see this; I know nails and salons are an industry but have not had personal experience with them.


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