Deal Abstract
Shopify for Beer! What this means is not only is it helping provide delivery, but also partnering and giving data back to brewers.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1070000|
|2. Fundraised So Far?|$196348|
|3. Pre-Money Valuation?|$14000000|
|4. Previous Year's Annual Revenue |$625468|
|5. Previous Year's Annual Net Income (Positive means Profitable, Negative means Burning Cash) |~$-483834|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
| Criteria | Yes/No |
|---|---|
| 1. A startup that is based in SV? | ****: Brooklyn, NY |
| 2. Has at least 2 founders? | ****: Two |
| 3. Has product in the market? | True: |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: 2018 rev grew from $182k to $625k in 2019 |
| 5. Notable investors? | ****: Didn't show any institutional investors |
| 6. Post-funding, will have 18 months of runway? | True: If they raise $750k then they have 1.5 years |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | TapRm is appears to be the Shopify of Beer, adding the support on the regulatory and digital marketing space |
| 2. Timing? | 4 | eCommerce, beer, for sure |
| 3. Monopoly? | 2 | I know some friends in NYC who use TapRm, but otherwise I know the alcohol delivery services better a la Drizly |
| 4. People? | 2 | Founder has the right background, but not seeing much of a team |
| 5. Distribution? | 2 | eCommerce is good, the tricky part here is navigating regulatory burden in each state |
| 6. Durability? | 4 | If they can build this out in all 50 states, absolutely for sure, even Amazon can't do beer delivery yet |
| 7. Secret? | 3 | By leveraging a legal background to navigate ecommerce laws for beer companies, TapRm can become the Shopify of beers. |
What has to go right for the startup to return money on investment:
1. Get ridiculously good at navigating legal limitations in every state; 2. Navigate the ID checking laws of beer delivery; 3. Be a SaaS platform and not just a tech-enabled agency
What the Risks Are
1. My peer from college started Drizly, and I remember him telling me about the nuances of delivering coffee as well as alcohol delivery. It's been over 5 years and they're in over half of the 50 U.S. states. My point here is that the regulatory burden is real. https://drizly.com/cities 2. Amazon/Uber/Instacart/DoorDash, all these large logistics delivery startups are itching for this pie, surprised more progress is not being made, 3. Couriers start to share data to B2B partners
Bonus Muhan's Notes
Very cool to see the progress that TapRm has made!
Updates
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So, did I invest?
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