Deal Abstract

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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So, did I invest?

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