Deal Abstract

Invest in TracFlo
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Another proptech company trying to digitize the construction industry. This one has solid revenue on a fair valuation with a suitable CEO, but can it break through where others have not?

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $80700
3. Pre-Money Valuation? $6500000
4. Previous Year's Annual Revenue $57000
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-75878

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: New York City
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: Grew from 2019 to 2020
5. Notable investors? True:, MIT sandbox fund
6. Post-funding, will have 18 months of runway? True: Needs ~$100k and has already exceeded that comfortably

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

Question Score Notes
1. Engineering? 3 Not sure this is a 10x better solution, need to clarify
2. Timing? 2 Construction is super resistant to innovation
3. Monopoly? 2 Good revenue but hardly a monopoly
4. People? 4 Strong team, esp CEO with carpenter, civil engineer, and construction background
5. Distribution? 3 This will be the key question
6. Durability? 4 If it can be built, very durable
7. Secret? 2 TracFlo can incentivize adoption via unfair advantages CEO has in selling this

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

1. Become 'Construction Payment Platform Like venmo for construction', 2. Scale sales and continue to have key decision makers buy into value prop; 3. Overcome challenges that other proptech companies have had e.g. PlanGrid, DigiBuild, etc.

What the Risks Are

1. Adoption; 2. Market growth is not venture speed; 3. Differentiation

Bonus Muhan's Notes

$57k on $6.5mm valuation for a company is a solid ratio and team seems promising. Need to do more due diligence.


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