Popshop Deal Memo (Closing Date: 2021–05–01)

Airbnb for commercial real estate. Company is reimagining commercial leases for companies and helping them secure short term leases for pop-ups.

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

Deal Abstract

Airbnb for commercial real estate. Company is reimagining commercial leases for companies and helping them secure short term leases for pop-ups.

Financials

1. Fundraising Target? $1070000
2. Fundraised So Far? $125925
3. Pre-Money Valuation? $10000000
4. Previous Year’s Annual Revenue: $393275
5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-467310

Six Calacanis Criteria

1. A startup that is based in SV? False, New York, NY
2. Has at least 2 founders? False, Two
3. Has product in the market? True, Revenue generating
4. 6 months of continuous user growth or 6 months of revenue? True, Grew revenue by 10x
5. Notable investors? False, Bootstrapped so far, with $1m from founders
6. Post-funding, will have 18 months of runway? True, Needs roughly $700k

Seven Thiel Tests

1. Engineering? 3, As someone who has booked a commercial lease, going through a digital marketplace is significantly better
2. Timing? 3, Good timing. Bricks still have value but no one wants to be locked in
3. Monopoly? 2, Solid revenue
4. People? 3, Cofounders have strong relationship, though I wonder if their skills are redundant
5. Distribution? 3, Have strong real estate backgrounds and have been able to build both sides of the marketplace
6. Durability? 3, Network of short term commercial real estate leasing
7. Secret? 3, COVID has hurt physical retail enough that they’ll allow a new model of leasing for short-term spaces to stop the hemoragging of money

What Has to Go Right

1. The market for pop-up shops keeps growing; 2. Eventually this becomes the leasing platform for all commercial real estate (or at least, it becomes good enough for negotating normal leases as well; 3. Grow other platform benefits

What Could Go Wrong

1. The physical marketplace is valuable, but the software has no value add; 2. will the demand of revenue from pop up be venture backable; 3. Will the acquisition costs for landlords ever go down where people self list

Muhan’s Bonus Notes

Very cool. Reminds me of a company Jason Calacanis invested in a company that lets you rent commercial retail storefronts by the hour for fun stuff like a birthday party. if anyone knows the company i’m talking about plz help me remember.

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/Popshop
3. Want me to cover your startup? Submit your ‘Request for Startup’ (RFS) submission here: https://airtable.com/shrzNK8tguH8qEUF6

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