Lil Bucks Deal Memo (Closing Date: 2021–04–23)

Female entrepreneur brings back Buckwheat superfood culture from Australia to the U.S. Working with the Hatchery in Chicago.

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

Deal Abstract

Female entrepreneur brings back Buckwheat superfood culture from Australia to the U.S. Working with the Hatchery in Chicago.

Financials

1. Fundraising Target? $250000
2. Fundraised So Far? $56000
3. Pre-Money Valuation? $4000000
4. Previous Year’s Annual Revenue: $25522
5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-46919

Six Calacanis Criteria

1. A startup that is based in SV? False, Trout Valley, IL
2. Has at least 2 founders? False, Emily Griffith, founder, owns 98.5%
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? True, Sort of: https://thehatcherychicago.org/
6. Post-funding, will have 18 months of runway? True, Call it $75k to have 1.5 years, very close

Seven Thiel Tests

1. Engineering? 1, Not an engineering innovation, just application of existing technology
2. Timing? 1, Not sure why buck superfoods at this point is about to be venture backable
3. Monopoly? 1, Don’t know anyone eating it
4. People? 2, Good founder but would have preferred more experience in food innovation
5. Distribution? 1, eCommerce is nice but getting into the retailers will be a pain
6. Durability? 1, Not sure what is durable about this
7. Secret? 2, Starting with buck foods is a beachhead for building a super food company

What Has to Go Right

1. Get into retailers; 2. sell sell sell; 3. expand into other superfoods and not just be a one product company

What Could Go Wrong

1. Food doesn’t scale fast; 2. Concerned about defensibility; 3. Ongoing R&D costs of new superfood procurement

Muhan’s Bonus Notes

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/Lil-Bucks
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.