SnapDNA Deal Memo (Closing Date: 2021–04–28)

Food and science executives have come up with a new way to test food for safety that can bring testing from days to hours. Pre-revenue and has a good deal of questions to answer in the quest to monetize.

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

Deal Abstract

Food and science executives have come up with a new way to test food for safety that can bring testing from days to hours. Pre-revenue and has a good deal of questions to answer in the quest to monetize.

Financials

1. Fundraising Target? $1070000
2. Fundraised So Far? $364100
3. Pre-Money Valuation? $28000000
4. Previous Year’s Annual Revenue: $0
5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-695911

Six Calacanis Criteria

1. A startup that is based in SV? True, Mountain View, CA
2. Has at least 2 founders? True, Three, though only CEO has more than 50%
3. Has product in the market? False, Only forecasts
4. 6 months of continuous user growth or 6 months of revenue? False, No revenue yet
5. Notable investors? False, Kept it vague
6. Post-funding, will have 18 months of runway? True, Yes, just barely

Seven Thiel Tests

1. Engineering? 3, Can bring testing of food safety from days to hours
2. Timing? 1, Not sure why food companies are incentivized to adopt this at this precise moment
3. Monopoly? 1, Nothing in the market yet
4. People? 2, Seem like fine executives, but not generating revenue and having no obvious wins somewhat concerning
5. Distribution? 2, Has to partner with big companies that will adopt innovation
6. Durability? 3, Very durable, assuming technology is good
7. Secret? 2, SnapDNA’s new technology is 10x better, solves enough pain points, and will grow to a billion dollar business

What Has to Go Right

1. Monetize and go to market; 2. Become a painkiller not a vitamin; 3. Nurture relationships with large companies to buy

What Could Go Wrong

1. Pre revenue; 2. Highly dependent on B2B adoption; 3. Speed of scale

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/SnapDNA
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.