Former YC founder and VP of Revenue from Atrium are teaming up from micro-PE investors to reboot a subscription law firm.
|1. Fundraising Target?||$5000000|
|2. Fundraised So Far?||$2351934|
|3. Pre-Money Valuation?||$24000000|
|4. Previous Year's Annual Revenue||$1450000|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$-147151|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||True: San Francisco, CA|
|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: Went from bankrupt to profitable|
|5. Notable investors?||True: No famous investors from what I can see, going the bootstrap route|
|6. Post-funding, will have 18 months of runway?||True: Profitable!|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|1. Engineering?||2||Business model innovation but solid|
|2. Timing?||2||More freelance gig economy|
|3. Monopoly?||3||Very good revenue and turned profitable within a year of formation|
|4. People?||4||Insanely overpowered team, one is a former YC founder and the other is a VP of Revenue from Atrium (YC/Justin Kan backed legal tech firm)|
|5. Distribution?||3||All subscription for online delivered legal services|
|6. Durability?||3||Building a legaltech company is really tough (see Atrium) so if they can build it to last, it will be hard to compete|
|7. Secret?||3||By choosing clients and providers who are providing value with outcomes instead of busy work, Upcounsel can make a money cultivating a marketplace of more efficient legal services|
What has to go right for the startup to return money on investment:
1. As the customer base scales, customers who waste lawyers time cannot go up; 2. Besides just a marketplace play, UpCounsel has to have sticky SaaS that makes legalwork more efficient; 3. Learn from the mistakes of Atrium
What the Risks Are
1. Legal services is heavily nepotism and fear based, so it is resistant to adopting new technology; 2. Recurring revenue and keeping lawyers/clients on the platform; 3. Keeping quality of unit economics as marketplace scales
Bonus Muhan's Notes
Really interesting in that this is a dream team to solve this problem, but will they be able to avoid Atrium's fate.
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