Every week I breakdown startup pitches with the added hook that you can invest whether you’re accredited or not (if you don't know what that means, click here).
I base my review on a 3-minute founder pitch and some light diligence.
My scoring system is not a validation of idea, or grading for likelihood of success. It just means, all things being equal at launch — this startup has these boxes checked.
What I look for:
Founder — ability to lead, sell into and influence a given market
Idea — is it inevitable or solving a BIG problem in a scaleable way
TAM — how big is the total addressable market
Traction — do they have meaningful early traction
Unfair Advantage — do they have a competitive edge
Key People: Scott Armstrong & Ryan Armstrong (father-son duo, the father, Scott, has previously built and sold a software company for $350M in 2014).
Traction: Guac is a top rated app by Daily Finance with more than 60k connected users who’ve collectively saved more than $6M via purchasing through the app. Courtesy of the pandemic, growth in the financial services sector has been insane and it is no wonder why given that 75% of US households are still living paycheck to paycheck.
Terms & Takeaway
Invest in Guac here 👉 Term Sheet
Security Type: Crowd Safe
Pre-Money Valuation: $18,500,000
Raised (as of publishing): $420,146
Minimum Investment: $150.00
Here's what I like: You know how I love a good finance app! I talk a lot about the importance of investing and “owning” your future — but I think a massively overlooked piece of that puzzle is savings. How can you invest if you have nothing to invest?? Guac is taking an approach to saving that targets younger generations by pairing user spending habits with an automated savings tool. Unlike rounding up your spend — which is more passive — Guac allows you to set a savings goal and suggests a percentage per purchase to help you more quickly achieve your goals. I really like the concept of actively participating in your savings rather than doing it in the background because it helps to reinforce better habits and financial awareness.
Here's what I don't love: The traction thus far is strong and the low acquisition cost of $25 is impressive, but I’d prefer the value cap closer to $10M than $18.5M at this stage. As mentioned above, the market is extremely competitive and I think there’s still a lot of risk here for investors until we see some meaningful revenue. And, speaking of competition, not unlike many other trendy startup sectors, saving and investing apps are becoming less and less differentiated, which means you’re investing in a brand/marketing company as much as you are the tech (though Guac does have patents pending).
Who should invest and why: I think everyone should care about saving, investing and the tools of the future that will help us all achieve more financial security. For that reason, Guac should be something you look at, and if it helps you save, why not invest in it? That’s the beauty of crowdfunding! And, while I think the deal is priced too high, the reality is if there’s going to be a strong exit the difference between $10M and $18M here is nominal.
As always, startup investing is super high-risk, anything can happen.
Invest in Guac here 👉 Term Sheet
Questions, DM me 🤳 @kitun.