Two sided marketplace for investors to buy revenue from small businesses. Pipe for small business. But is it venture backable?
|1. Fundraising Target?||$950000|
|2. Fundraised So Far?||$61200|
|3. Pre-Money Valuation?||$15000000|
|4. Previous Year's Annual Revenue||$123427|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$-167890|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: Los Angeles, CA|
|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?||False: Declining revenue from 2019 to 2020|
|5. Notable investors?||False: No one I recognize|
|6. Post-funding, will have 18 months of runway?||True: Needs $250k to get 18 months of runway|
|2. Timing?||3||Good timing, reminds me of Pipe: https://techcrunch.com/2021/03/09/this-pipe-ing-hot-startup-just-raised-50m-to-be-the-nasdaq-for-revenue/|
|3. Monopoly?||1||Pipe to me is the big player in this space|
|4. People?||2||Team seems fine but not seeing any major unfair advantages here|
|5. Distribution?||2||As mentioned with pipe, needs unfair access to accredited investors|
|6. Durability?||3||Very defensible marketplace if they could build both sides|
|7. Secret?||2||Providing Pipe like services to non venture businesses is an outsized opportunity|
What has to go right for the startup to return money on investment:
1. Build both sides of the marketplace; 2. Consistently underwrite risk more efficiently than banks; 3. Eventually branch into unaccredited debt/investment
What the Risks Are
1. Revenue declined; 2. Small businesses don't fit the Pipe revenue forward model; 3. Other businesses will scale faster to eat this lunch
Bonus Muhan's Notes
Very cool to see this category of business. Going to ask founder questions to get more clarity.
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