Deal Abstract

Invest in Upstack: The fast-growing global pool of highly qualified, vetted software developers | Wefunder
The fast-growing global pool of highly qualified, vetted software developers
Upstack on Wefunder

Vetted developer agency is raising money to build more remote friendly websites for various startups, such as Campus Concierge or MealPal.

Financials (VRB)

Question Notes
1. Fundraising Target? $5000000
2. Fundraised So Far? $331634
3. Pre-Money Valuation? $80000000
4. Previous Year's Annual Revenue $2250406
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-62245
Source

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, NY
2. Has at least 2 founders? False: 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 1.6m in 2019 to 2.2 in 2020
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: Very low burn

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

Question Score Notes
1. Engineering? 1 Seems like a vetted marketplace, which is great, but not a new engineering concept
2. Timing? 2 Good time for remote developers
3. Monopoly? 1 Good revenue for marketplace, but not as good as say, TopTal
4. People? 2 Good team, with CEO having background at Monster
5. Distribution? 3 Impressed by some of the customers this team has gotten
6. Durability? 2 I believe the supply is durable, if not growing at a tepid pace
7. Secret? 2 Building a verified marketplace for developer services right now is a venture sized business

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

1. Grow beyond just a service business; 2. Maintain quality at scale; 3. Systematize getting large clients and increasing lifetime collaboration

What the Risks Are

1. Service business not VC backable; 2. Marketplace can't compete against Toptal or Thumbtack; 3. No-code reducing demand for traditional dev agencies

Bonus Muhan's Notes

I know MealPal, very curious to know how Upstack go this customer.

Updates

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.