Deal Abstract

https://invest.wincshares.com/

Retrospective deal memo for Winc. Raised $4.87MM on $110MM valuation earlier this year in March. Now raising again directly again on their website at $1.75/share, with total outstanding shares of $86M meaning a $150MM valuation if they sell all shares at that price. Had no meaning financial growth from 2014 to 2019.


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The 6 Calacanis Characteristics (91 161 18)

CheckYes/No
1. A startup that is based in SVFalse: Los Angeles, CA
2. Has at least 2 founders Yes (2)
3. Has product in the market Yes
4. 6 months of continuous user growth or 6 months of revenue.No: !!! Look at revenue drop from 2018 to 2019
5. Notable investors?Yes: In spades, including Wavemaker, Bessemer, and 500 Startups.
6. Post-funding, will have 18 months of runway No: Raising 10M shares at $1.75 so $17.5M, on a $7.75M loss for 2019, that’s 27 months of runway, they’re trying to be profitable in 2021.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • Ambiguous: Marginal improvement.
  2. The Timing question
    • Good: Right time for DTC brands.
  3. The monopoly question
    • Bad: Not a winner take all market, see WineLibrary TV.
  4. The people question: 
    • Good: Team is good.
  5. The distribution question
    • Good: D2C.
  6. The durability question
    • Good: Media company building network of content providers, content consumers, strategic organizations to partner with.
  7. *What is the hopeful secret?: 
    • This company has future growth oriented projects that will allow it to beat Gary Vaynerchuk’s WineLibrary media presence.

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

  1. N/A

What the Risks Are

  1. N/A

Muhan’s Bonus Notes

Fascinating, especially given that despite the growth, revenues are still half of Gary Vaynerchuk’s WineLibrary at $60M ARR.

In addition, that they got Bessemer Venture Partners, who I am more familiar with investing in cloud based businesses.

Financials (References)

  • Current Fundraised: $4.87M
  • Valuation: ~$110MM

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?

Click here to find out.

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