AudioCardio Deal Memo (Closing Date: 2021–05–01)

Want to see the complete rich format deal memo? Read the original post at: https://muhanzhang.com/AudioCardio

Deal Abstract

Mobile app is helping people train their hearing. Very positive business, the question is how they can grow to become venture backable.

Financials

  1. Fundraising Target? $1070000
  2. Fundraised So Far? $57647
  3. Pre-Money Valuation? $9750000
  4. Previous Year’s Annual Revenue: $2288
  5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-64049

Six Calacanis Criteria

  1. A startup that is based in SV? False, Santa Monica, CA
  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, Though modest revenue
  5. Notable investors? False, No one I recognize
  6. Post-funding, will have 18 months of runway? True, Low burn, needs only $100k

Seven Thiel Tests

  1. Engineering? 3, Don’t know of another app that not only diagnoses but improves hearing
  2. Timing? 1, Not sure why this is the time this market will explode
  3. Monopoly? 2, Good amount of user data
  4. People? 2, Team seems strong, though strange that the technical co-founder isn’t on there either
  5. Distribution? 2, Distribution to app store, but are the founders influencers in this space?
  6. Durability? 2, What’s to stop someone else from making this app? What’s making customers sticky here?
  7. Secret? 3, By using novel technology training processes, the AudioCardio team can meaningfully improve people’s hearing and use that as a beachhead into a general wellness app

What Has to Go Right

  1. Scale revenue; 2. Develop a platform, not just be a product; 3. Demonstrate meaningful improvement of hearing at scale

What Could Go Wrong

  1. Too niche’ 2. Ambiguous impact of product; 3. No market

Muhan’s Bonus Notes

Excited to see the founders vision for turning this into a platform.

Investment Decision Teaser

So, did I invest?

  1. Subscribe to https://muhanzhang.com/ to see my final investment decisions, keep track of my portfolio, and receive ongoing updates on my journey to investing in 50 startups as an unaccredited investor.
  2. Read the rich format deal memo here: https://muhanzhang.com/AudioCardio
  3. Want me to cover your startup? Submit your ‘Request for Startup’ (RFS) submission here: https://airtable.com/shrzNK8tguH8qEUF6

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

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Muhan Zhang

Muhan Zhang

Founder of Startup Investing for All, for angel investors seeking better turns, together. 1st employee and COO @Yang2020. Subscribe at www.muhanzhang.com