Deal Abstract

Wii Sports for the Oculus Rift has arrived in the form of VR cycling exercise.

Financials (VRB)

Question	Notes
1. Fundraising Target?	$1070000
2. Fundraised So Far?	$746995
3. Pre-Money Valuation?	$24300000
4. Previous Year's Annual Revenue	$372537
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)	~$-1706244

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: Somewhere in, MA
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: Rev increased from 2020 to 2021, but not by much
5. Notable investors?	False: No one I recognize
6. Post-funding, will have 18 months of runway?	False: Very high burn, would need to clear 2mm+

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

Question	Score	Notes
1. Engineering?	2	Fitness on Oculus
2. Timing?	2	Metaverse? But the Oculus has been out for a while
3. Monopoly?	3	Pretty strong adoption
4. People?	3	Team seems reasonably strong, but no famous investors I recognize
5. Distribution?	2	Distribution through Oculus? Is this a game studio?
6. Durability?	1	Not sure what's stopping another game studio from building Oculus Fitness
7. Secret?	1	VirZoom and the Oculus has the ability to do to fitness what Wii did with WiiSports

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

1. Sales of the Oculus have to go like the Wii; 2. VirZoom has to become a game studio not just a one off; 3. Design of the game has to be fun and remain sticky

What the Risks Are

1. People don't like to exercise; 2. Steam or Wii come in with their virtual reality exercise solution; 3. This company is not a game studio

Bonus Muhan's Notes

I'm surprised that Oculus didn't go the vertical integration route post Facebook and develop their own fitness games

Updates

This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.

Review these deal memos every time the startup raises a new round

Test if original thesis still applies

Notice trends in how you think

So, did I invest?

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