Deal Abstract

Another Janover Ventures, but with significantly better fundamentals. But is it venture backable?

Janover Ventures Deal Memo (November 2020)

OwnUp.com for commercial real estate financing. Fundraising $1m on a $20m valuation. Has revenues of $531k from network of websites that drive traffic to them. Profitable. I tested the product and didn’t get a response.

Startup Investing for All by Muhan ZhangMuhan Zhang

Financials (VRB)

Question	Notes
1. Fundraising Target?	$1700000
2. Fundraised So Far?	$1551192
3. Pre-Money Valuation?	$13800000
4. Previous Year's Annual Revenue	$1219316
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)	~$159011

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: Newark, NJ
2. Has at least 2 founders?	True: Two
3. Has product in the market?	True: Revenue generating
4. 6 months of continuous user growth or 6 months of revenue?	True: $892k to $1219k from 2019 to 2020
5. Notable investors?	True: Backed by Techstars, Newark Venture Partners, and real estate industry executives
6. Post-funding, will have 18 months of runway?	True: Appears to be profitable

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

Question	Score	Notes
1. Engineering?	3	Real techies coming in to solve this problem
2. Timing?	3	OwnUp for commercial real estate
3. Monopoly?	3	Really strong revenue numbers
4. People?	4	Strong techie team
5. Distribution?	2	No crazy unfair advantage, but digital native marketing strategy
6. Durability?	3	Big data play
7. Secret?	2	Commercial mortgage and financing is going to go digital transformation at a venture paced speed

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

1. More real estate professionals have to go digital native; 2. Find the power users and exploit those who need constant new financing; 3. Monetize a pricing engine

What the Risks Are

1. Commercial real estate financing to digital transformation is not venture back-able development, 2. New technology for mortgage quote a nice feature but not a painkiller product; 3. Some mortgage brokers get their act together or get acquired by another fintech company and digitize their rolodexes (though I confess this last one is a stretch to me.)

Bonus Muhan's Notes

So cool. Need to ask against Janover Ventures.

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.