Deal Abstract
HR platform company that claims to be able to use AI to make sure all candidates are being considered fairly. Burned $1.8MM to make $200k in revenue. Coming in at $25MM valuation and claims Amazon as an investor.
Interested in startup investing? Subscribe to my premium newsletter, Startup Investing, to receive weekly content, exclusively tailored to accompany investors in their venture journey.
Decision
Pass
Why Investing/Passing
- Valuation Too Large: $25MM
- Amazon as Investor?: Can’t verify that Amazon is invested in the company.
- Burning Too Quickly: Burned $1.8MM generating $208k in revenue. That’s an astounding ratio.
The 6 Calacanis Characteristics (91 161 18)
| Check | Yes/No |
| 1. A startup that is based in SV | No: Austin, TX |
| 2. Has at least 2 founders | No: 1 |
| 3. Has product in the market | Yes |
| 4. 6 months of continuous user growth or 6 months of revenue. | Yes: 2018 rev was 97k and 2019 rev was 208k. |
| 5. Notable investors? | Yes: allegedly Amazon, but I’m seeing no evidence |
| 6. Post-funding, will have 18 months of runway | False: 2019 burn was $1.8MM, raised 1,070k, so only 7 months. |
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- Didn’t Bother
- The Timing question:
- Didn’t Bother
- The monopoly question:
- Didn’t Bother.
- The people question:
- Didn’t Bother.
- The distribution question:
- Didn’t Bother.
- The durability question:
- Didn’t Bother.
- *What is the hopeful secret?:
- Didn’t Bother.
What has to go right for the startup to return money on investment:
- N/A
What the Risks Are
- N/A
Muhan’s Bonus Notes
Not a good use of time to explore intellectual biases when $25MM valuation on $1.8MM burn and $200k revenue. Cannot confirm Amazon is investing. Did not see financial statements.
CEO responded to my questions here: https://wefunder.com/comments/103609
Financials (References)
- Current Fundraised: $1M
- Valuation: ~25MM
Updates
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.