Deal Abstract
Plant based Chipotle/Sweetgreen/fast casual teams up with national provider Aramark to launch a new category of fast casual food.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$250000|
|2. Fundraised So Far?|$97570|
|3. Pre-Money Valuation?|$10000000|
|4. Previous Year's Annual Revenue |$2925603|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-26351|
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: Winston-Salem, NC |
| 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: 2.3m to 2.9m from 2018 to 2019 |
| 5. Notable investors? | False: No names named |
| 6. Post-funding, will have 18 months of runway? | True: Year burn was only 26k |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | 10x better than the standard Aramark faire? For sure. |
| 2. Timing? | 2 | People want this type of food for sure |
| 3. Monopoly? | 2 | Uncertain if monopoly of plant forward eaters, but good revenue |
| 4. People? | 3 | Right people, esp for being able to license to Aramark |
| 5. Distribution? | 3 | See above |
| 6. Durability? | 2 | Seems durable, esp since I don't see Aramark doing much innovation |
| 7. Secret? | 3 | Fast casual chains going after the mainstream market missed the opportunity of Aramark/national niche franchises for a long tail business |
What has to go right for the startup to return money on investment:
1. Needs to scale more efficiently; 2. Sell more the franchise and idea instead of the small business; 3. Exploit the Aramark advantage
What the Risks Are
1. Food business not venture backable; 2. Distribution not as relevant as delivery makes cloud kitchens more competitive; 3. Ongoing costs of R&D high to make new on brand products
Bonus Muhan's Notes
Very cool! I'll be google around my neighborhood to see if I can try it soon.
Updates
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Review these deal memos every time the startup raises a new round
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