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.

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Why Investing/Passing

  1. Valuation Too Large: $25MM
  2. Amazon as Investor?: Can’t verify that Amazon is invested in the company.
  3. Burning Too Quickly: Burned $1.8MM generating $208k in revenue. That’s an astounding ratio.

The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: 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)

  1. The Engineering question:
    • Didn’t Bother
  2. The Timing question
    • Didn’t Bother
  3. The monopoly question
    • Didn’t Bother.
  4. The people question: 
    • Didn’t Bother.
  5. The distribution question
    • Didn’t Bother.
  6. The durability question
    • Didn’t Bother.
  7. *What is the hopeful secret?: 
    • Didn’t Bother.

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

  1. N/A

What the Risks Are

  1. 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:

Financials (References)

  • Current Fundraised: $1M
  • Valuation: ~25MM


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