Deal Abstract

Invest in Tapa
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Exited founders from a commercial real estate service business are coming back to build a SaaS business that will serve as the Zapier for all IoT in commercial buildings.

Financials (VRB)

|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1000000|
|2. Fundraised So Far?|$73000|
|3. Pre-Money Valuation?|$8000000|
|4. Previous Year's Annual Revenue |$123000|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-733601|

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: Herndon, VA
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: Monetized in 2019
5. Notable investors? False: Bootstrapped
6. Post-funding, will have 18 months of runway? False: Not on track to do so at present
Source

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

Question Score Notes
1. Engineering? 2 Using open tech and SaaS to build a Zapier/dashboard for commercial real estate
2. Timing? 2 Like Zapier, with more proliferation of IoT companies and devices, will need one central hub to manage it all
3. Monopoly? 1 Some customers but hardly a monopoly
4. People? 3 Team looks really good, having built SmartBT a service business already like this, and has a SaaS tech CEO
5. Distribution? 2 B2B, very low sales cycles
6. Durability? 4 If can be built, incredibly durable.
7. Secret? 3 The desire for innovation in commercial real estate is great enough that they'll pay money for an admin platform that handles all endpoints of the stack

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

1. IoT for new commercial buildings continues to be revenue driver not cost center; 2. Successfully sell integrated platform to C-suites and millennial executives/workers; 3. Build scalable technology and eventually be a value add platform for IoT devices hoping to integrate with the platform

What the Risks Are

1. Will this really be one platform to monitor them all or just another specific tool; 2. Maybe this is not a 10x better solution because each IoT solution individually will have a fine dashboard; 3.  Companies that already have a strong property management platform in the B2B space will expand their position (e.g. something like Buildium: https://www.buildium.com/)

Bonus Muhan's Notes

Very, very cool company. Right on the fence here because there's more here for me to understand, but the proposition exists.

Updates

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