SaaS company wants to sell an energy monitoring solution to businesses to help reduce their utility bill.
- Fundraising Target? $1070000
- Fundraised So Far? $453209
- Pre-Money Valuation? $18000000
- Previous Year’s Annual Revenue: $191935
- Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-793777
Six Calacanis Criteria
- A startup that is based in SV? False, Tampa, FL
- Has at least 2 founders? False, One founder
- Has product in the market? True, Revenue generating
- 6 months of continuous user growth or 6 months of revenue? False, Revenue dropped from 2018 to 2019
- Notable investors? False, No one I recognize
- Post-funding, will have 18 months of runway? True, At a mil will have 18 mths runway
Seven Thiel Tests
- Engineering? 2, Platform that helps understand energy spikes better
- Timing? 1, Not sure why now is the perfect time to build this business
- Monopoly? 2, Has a good number of high profile customers, but declining revenue
- People? 2, Strong founder but no other major teammates
- Distribution? 2, Selling B2B requires connections
- Durability? 3, If can be built, very durable
- Secret? 1, Energy costs are enough of a pain point that large businesses will pay for a SaaS platform to help them manage and save energy costs
What Has to Go Right
- Get growth back on track; 2. Scale out a B2B sales playbook; 3. Demonstrate consistent return on investment for monitoring energy savings
What Could Go Wrong
- Is a third party SaaS business the right entity to build this? 2. High costs and not corresponding high revenue; 3. Vitamin not a painkiller
Muhan’s Bonus Notes
Very cool business, need to see founder’s vision for scaling
So, did I invest?
- 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.
- Read the rich format deal memo here: https://muhanzhang.com/COI-Energy
- 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 firstname.lastname@example.org and let me know.