Deal Abstract

Invest in Worth: Worth uses social media to convert customers into marketers. | Wefunder
Worth uses social media to convert customers into marketers.

Team is building a competitor to RAD Technologies. What's interesting is this company is taking 50% of ad spend.

Financials (VRB)

Question Notes
1. Fundraising Target? $300000
2. Fundraised So Far? $290458
3. Pre-Money Valuation? $5500000
4. Previous Year's Annual Revenue $4030
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-176668

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: Los Angeles, CA
2. Has at least 2 founders? True: Two
3. Has product in the market? True: Essentially an agency/job board for influencers to make content
4. 6 months of continuous user growth or 6 months of revenue? True: Allegedly $93k in revenue second half of 2020, aiming for 1.3m in 2021
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: Done now

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

Question Score Notes
1. Engineering? 2 Not seeing 10x better
2. Timing? 2 I have seen several of these including RAD and Insense, so makes sense
3. Monopoly? 1 See competition above
4. People? 2 Team seems lovely but no obvious wins in influencer marketing
5. Distribution? 2 Fine, selling B2B
6. Durability? 1 Starting to suspect these influencer networks have the multihoming problem e.g. not much defensible
7. Secret? 2 A nice UI/UX will allow this business to charge 50% of all ad spend for influencer content marketing

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

1. Business model has to scale well; 2. Keep building two-sided marketplace; 3. Eventually be able to compete with the SocialNatives of the world

What the Risks Are

1. Influencer marketing blah blah; 2. What's defensible? Why is talent staying on this platform?; 3. Cannibalizing

Want to read the whole post?

You don't have access to this post on Startup Investing for All by Muhan Zhang at the moment, but if you upgrade your account you'll be able to see the whole thing, including comments, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.