Po Campo Deal Memo (Closing Date: 2021–04–02)

Innovation in the cycling backpack/apparel market. Founder has bootstrapped a lifestyle brand and raising capital to grow.

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

Deal Abstract

Innovation in the cycling backpack/apparel market. Founder has bootstrapped a lifestyle brand and raising capital to grow.

Financials

1. Fundraising Target? $250000
2. Fundraised So Far? $40537
3. Pre-Money Valuation? $3500000
4. Previous Year’s Annual Revenue: $217841
5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-43009

Six Calacanis Criteria

1. A startup that is based in SV? False, New York, NY
2. Has at least 2 founders? False, One founder who owns 94% of stock
3. Has product in the market? True, Revenue generating
4. 6 months of continuous user growth or 6 months of revenue? False, Revenue decreased from 2018 to 2019
5. Notable investors? False, Bootstrapped
6. Post-funding, will have 18 months of runway? True, $43k annual burn, at 18 months would be ~$75k

Seven Thiel Tests

1. Engineering? 2, Unique bicycle backpack innovation, as a cyclist, I wonder how this plays with bikeshare
2. Timing? 1, Cycling should increase but uncertain if venture backable
3. Monopoly? 1, Don’t know anyone with one of these bags
4. People? 3, Good people to be building this product
5. Distribution? 3, Seem to have really figured out distribution
6. Durability? 2, Lifestyle brand, fairly defensible
7. Secret? 2, The population of city commuting cyclist is about to boom in venture style

What Has to Go Right

1. Partner with bikeshares at some point; 2. Enter into cyclist apparel and other accessories; 3. Keep innovating new products

What Could Go Wrong

1. Mass market vs high end product; 2. Revenue did not increase 2018 to 2019, concerned if this remains the case; 3. Cycling remains a niche market and doesn’t go mainstream

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/Po-Campo
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.