Deal Abstract
Food and science executives have come up with a new way to test food for safety that can bring testing from days to hours. Pre-revenue and has a good deal of questions to answer in the quest to monetize.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1070000|
|2. Fundraised So Far?|$364100|
|3. Pre-Money Valuation?|$28000000|
|4. Previous Year's Annual Revenue |$0|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-695911|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
| Criteria | Yes/No |
|---|---|
| 1. A startup that is based in SV? | True: Mountain View, CA |
| 2. Has at least 2 founders? | True: Two |
| 3. Has product in the market? | False: Only forecasts |
| 4. 6 months of continuous user growth or 6 months of revenue? | False: No revenue yet |
| 5. Notable investors? | False: Kept it vague |
| 6. Post-funding, will have 18 months of runway? | True: Yes, just barely |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | Can bring testing of food safety from days to hours |
| 2. Timing? | 1 | Not sure why food companies are incentivized to adopt this at this precise moment |
| 3. Monopoly? | 1 | Nothing in the market yet |
| 4. People? | 2 | Seem like fine executives, but not generating revenue and having no obvious wins somewhat concerning |
| 5. Distribution? | 2 | Has to partner with big companies that will adopt innovation |
| 6. Durability? | 3 | Very durable, assuming technology is good |
| 7. Secret? | 2 | SnapDNA's new technology is 10x better, solves enough pain points, and will grow to a billion dollar business |
What has to go right for the startup to return money on investment:
1. Monetize and go to market; 2. Become a painkiller not a vitamin; 3. Nurture relationships with large companies to buy
What the Risks Are
1. Pre revenue; 2. Highly dependent on B2B adoption; 3. Speed of scale
Bonus Muhan's Notes
Updates
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.
Review these deal memos every time the startup raises a new round
Test if original thesis still applies
Notice trends in how you think
So, did I invest?
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