Swift Rails Deal Memo (Closing Date: 2020–12–20)

Engineers from Buffalo, NY are teaming up together to deliver a light rail mobility solution. Pre-product, pre-revenue, and eager to see what the innovation is.

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Deal Abstract

Engineers from Buffalo, NY are teaming up together to deliver a light rail mobility solution. Pre-product, pre-revenue, and eager to see what the innovation is.

Financials

  1. Fundraising Target? $1070000
  2. Fundraised So Far? $347118
  3. Pre-Money Valuation? $8950000
  4. Previous Year’s Annual Revenue: $0
  5. Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-19454

Six Calacanis Criteria

  1. A startup that is based in SV? False, Lancaster, NY
  2. Has at least 2 founders? True, Two
  3. Has product in the market? False, Doesn’t look like it
  4. 6 months of continuous user growth or 6 months of revenue? False, Pre-revenue
  5. Notable investors? False, No one I recognize
  6. Post-funding, will have 18 months of runway? True, At $347k presently, but honestly no meaningful burn because no meaningful progress on business eyt

Seven Thiel Tests

  1. Engineering? 1, ‘It’s like cars, but higher off the ground and limited to expensive infrastructure’ as one mobility expert I consulted said
  2. Timing? 1, Why is now the right time to build this?
  3. Monopoly? 1, Nothing in the market
  4. People? 2, Good tech talent but no one with experience selling and monetizing this solution
  5. Distribution? 1, Must be very burdensome to get approval up and running
  6. Durability? 2, What happens when autonomous vehicles hit?
  7. Secret? 1, The confluence of technologies right now is going to enable light rail personalized transportation into a billion dollar business

What Has to Go Right

  1. Take product to market; 2. Scale efficiently; 3. Get very good at identifying cities with the shortest sales cycles

What Could Go Wrong

  1. Solution looking for problem; 2. Costs of development very large; 3. Not venture backable

Muhan’s Bonus Notes

Investment Decision Teaser

So, did I invest?

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  2. Read the rich format deal memo here: https://muhanzhang.com/Swift-Rails
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Founder of Startup Investing for All, for angel investors seeking better turns, together. 1st employee and COO @Yang2020. Subscribe at www.muhanzhang.com