Deal Abstract

Invest in Soraban: Helping CPAs give companies financial reviews faster | Wefunder
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Soraban on Wefunder

Couple of Korean-American software bros out in Arizona want to build automation focused platform for providing company financial audits. Extremely early stage, but investors love hearing things like "we turned ourselves into CPAs and prepared 50 financial audits so we could assess what to automate."

Financials (VRB)

|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1m|
|2. Fundraised So Far?|$70k|
|3. Pre-Money Valuation?|$6m|
|4. Previous Year's Annual Revenue |$3|
|5. Previous Year's Annual Burn |~$6.6k|

The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)

Criteria Yes/No
1. A startup that is based in SV? No: Tempe, AZ
2. Has at least 2 founders? Yes: Two
3. Has product in the market? Yes:
4. 6 months of continuous user growth or 6 months of revenue? Yes.
5. Notable investors? No
6. Post-funding, will have 18 months of runway? Yes

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

Question Score Notes
1. Engineering? 2 Can't see product, but automating CPA work would def help a la Visor
2. Timing? 3 See Visor above
3. Monopoly? 3 I've spent a lot of time looking at equity crowdfunding financial statements and it's definitely ripe for automation
4. People? 4 I like that the two founders are brothers, software engineers, and they prepared some tax documents themselves.
5. Distribution? 3 Do well with WeFunder then rinse lather repeat for other platforms.
6. Durability? 3 Automation focused business platform for automating financial audits.
7. Secret? 4 Accounting is a service based industry that is ripe for automation via a platform.

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

  1. Scale for more equity crowdfunding platforms
  2. Be a platform not a CPA house a la Atrium
  3. Dominate this one niche then start automating workflows for CPAs all over

What the Risks Are

  1. Compete or cooperate with independent CPAs
  2. Product risk/what is the actual automation?
  3. Don't get caught holding the bag with manual work a la SIFA-1

Bonus Muhan's Notes

Liked this company more than I expected. Will reach out and ask questions.

Updates

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So, did I invest?

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.