Drink Monday Deal Memo (Closing Date: 2021–05–01)

Alternative meat industry meats (heh) alcohol — alternative alcohol industry is creating mocktail liquor and going d2c. Doesn’t even have to go through Drizly!

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

Deal Abstract

Alternative meat industry meats (heh) alcohol — alternative alcohol industry is creating mocktail liquor and going d2c. Doesn’t even have to go through Drizly!

Financials

1. Fundraising Target? $1070000
2. Fundraised So Far? $281879
3. Pre-Money Valuation? $7000000
4. Previous Year’s Annual Revenue: $22090
5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-21859

Six Calacanis Criteria

1. A startup that is based in SV? False, Carlsbad, 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, Revenue increased from 2018 to 2019
5. Notable investors? False, No one I recognize
6. Post-funding, will have 18 months of runway? True, Very comfortable runway

Seven Thiel Tests

1. Engineering? 3, Honestly product looks great, and available on Amazon
2. Timing? 3, Healthy is definitely in
3. Monopoly? 3, 4 stars on Amazon!
4. People? 2, Team seems good
5. Distribution? 3, Direct to consumer and available by Amazon
6. Durability? 2, Seems like the same idea as alternative meats, has to get the winning formula then win win win
7. Secret? 2, The wellness movement is going to disrupt social drinking by keeping the social and cutting the negative effects of alcohol

What Has to Go Right

1. Profitable margins are amazing, now that product is validated, needs to go build brand and distribution; 2. Release more alcohols substitutes, and not only compete against alcohol, but actually beat it and become superior product; 3. Content marketing and maybe even getting into media to popularize mocktails

What Could Go Wrong

1. People drink for many reasons, among which, is the buzz from alcohol; 2. Is this that defensible?; 3. Is the mainstream market ready for this yet?

Muhan’s Bonus Notes

So cool. Might need to Amazon and try this.

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/Drink-Monday
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.