Deal Abstract
https://www.seedinvest.com/snapstrat/bridge
SaaS company hoping to sell a dashboard to C-suite executives, starting out with CMOs. They have revenue, and want to make consulting work more integrated via data. Possibly like Mint.com (which collects and demonstrates all your financial info in one place) for C-Suite or Geckoboard. Already has sales with large enterprise CMOs of Sephora and Frontier technology.
Decision
No
Why Investing/Passing
- Passing because despite having large famous customers and seemingly legit VC team, not seeing the vision.
- Revenue dropped from 2019 to 2018. Crude but clear signal of not gaining further clarity on what the business is.
- Even if the product works, it’s providing a value that seems incremental rather than a magnitude greater.
The 6 Calacanis Characteristics (91 161 18)
| Check | Pass/Fail |
| 1. A startup that is based in SV | Pass: Oakland, CA according to LinkedIn. |
| 2. Has at least 2 founders | Pass (3+ Head of Sales & Marketing) |
| 3. Has product in the market | Pass |
| 4. 6 months of continuous user growth or 6 months of revenue. | Fail: (2019 revenue was 120k, 2018 revenue was 166k.) |
| 5. Notable investors? | Shasta Ventures, who seem legit, but I don’t know anyone from this team from my knowledge of VCs. Apparently they invested in Canva, Dollar Shave Club, Hinge, Mint.com, Nest, Turo, Zuora, etc. |
| 6. Post-funding, will have 18 months of runway | Pass: 2019 burn was 273k and targeting 2.5M was raised, giving 9.15 months of burn. |
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- Probably bad: how much better is this company compared to Google Sheets/Zapier/Geckoboards of the world? If you’re selling to CMOs that’s all well and good but doesn’t scale tremendously.
- The Timing question:
- Bad: it’s cheap to build SaaS, conceded. But uncertain why this particular time is when CMO’s/execs will suddenly adopt executive dashboards by a large magnitude of order.
- The monopoly question:
- Bad: Again, already plenty of dashboards/pivot tables/etc for people who care. Zapier has a great business as the maintainer of API integrations, but not seeing how SnapStrat would do this.
- The people question:
- Good: Team seems smart and competent.
- The distribution question:
- Good: The team’s one saving grace. They sold to Sephora and Frontier which is great. But not seeing how this software-for-consultants ultimately scales to SaaS and isn’t just tech-enabled consulting.
- The durability question:
- Bad: What’s to stop someone else from making another dashboard app?
- *What is the hopeful secret?:
- Execs will come to rely on dashboards and technology in a non-linear fashion in the coming years, and require different information than most other forms of dashboards.
- Execs will come to rely on dashboards and technology in a non-linear fashion in the coming years, and require different information than most other forms of dashboards.
What has to go right for the startup to return money on investment:
- Executives become more tech-trusting and tech-literate in large scale in the coming years.
- There is something proprietary developed, not just from presentation, but SnapStrat needs to not only amalgamate information but ultimately have some novel processing of insight.
- SnapStrat starts developing luxury dashboards but after figuring out the product, develops exec dashboard for smaller companies e.g. startups that Shasta has funded.
What the Risks Are
- The company is essentially a consulting shop, relying on connections to start the business but ultimately can’t find scalable product.
- Timing, not sure why this is the right time to build this business. Doesn’t seem like a venture backable business.
- Why is this a painkiller rather than a nice to have? It seems less personalized than an analyst but more expensive than an automatic report.
Financials (References)
- Total Amount Raised: US $55,000
- Total Round Size: US $2,500,000
- Raise Description: Bridge
- Minimum Investment: US $1,000 per investor
- Security Type: Crowd Note
- Valuation Cap: US $6,500,000
- Offering Type: Side by Side Offering