Envel Deal Memo (Closing Date: 2021–03–18)
Nerds from Boston raised (and burned!) an astounding amount of money to build an app for budgeting. Is this the future of banking?
2 min readFeb 8, 2021
Want to see the complete rich format deal memo? Read the original post at: https://muhanzhang.com/Envel
Deal Abstract
Nerds from Boston raised (and burned!) an astounding amount of money to build an app for budgeting. Is this the future of banking?
Financials
- Fundraising Target? $1070000
- Fundraised So Far? $1225313
- Pre-Money Valuation? $15000000
- Previous Year’s Annual Revenue: $0
- Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-1143644
Six Calacanis Criteria
- A startup that is based in SV? False, Boston, MA
- Has at least 2 founders? False, One founder
- Has product in the market? True, Beta online
- 6 months of continuous user growth or 6 months of revenue? False, No revenue
- Notable investors? False, Lots of institutional accelerator free competition money
- Post-funding, will have 18 months of runway? False, Burning a lot of money
Seven Thiel Tests
- Engineering? 2, Prettier app but nothing fundamentally different
- Timing? 2, Good timing, but is this the right solution?
- Monopoly? 1, 20 ratings on App Store, nothing to write home about
- People? 1, No one with banking experience
- Distribution? 1, Downloading app to get users?
- Durability? 2, It is a bank, so once someone starts with them should not switch easily
- Secret? 1, Building a better UI/UX mobile app will make a superior bank
What Has to Go Right
- Develop a monetization strategy; 2. Acquire users; 3. Build a platform for tight integration via digital banking
What Could Go Wrong
- Founders have no experience in banking; 2. What is the proprietary value add; 3. AI budgeting is not that useful of a feature
Muhan’s Bonus Notes
So, did I invest?
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- Read the rich format deal memo here: https://muhanzhang.com/Envel
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