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: Dr. Daniel Gartenberg (world-renowned Sleep Scientist. TED Talk w/4+ million views), Melissa Mueller, (founder of Designery), Dan Roberts (PhD in Human Factors and Applied Cognition)
Traction: If you’re a Twitter bug like myself it’s nearly impossible that you’ve not seen a TON of entrepreneurs and athletes talking about the impact of sleeplessness and how they’re trying to improve recovery with apps and tools such as Whoop or Eight Sleep — that’s because 1 in 3 Americans have a sleep disorder and they’re currently spending almost $80B annually on sleep aids. Sleepspace takes the market on by offering a sleep system delivered through an app connected with Apple, google, Amazing, Oura Ring, Garmin, and so on! To date, they’ve raised $1.2M from VCs and $3.5M in grants and are currently generating $10k MRR from more than 2,000 paying subscribers and patent users.
Terms & Takeaway
Invest in Sleepspace here 👉 Term Sheet
Security Type: Reg CF
Pre-Money Valuation: $10,000,000
Raised (as of publishing): $219,814
Minimum Investment: $100.00
Here's what I like: I’ve struggled with sleep for years, partially stress and diet-related and partially because I started the terrible habit of waking up in the middle of the night to jot ideas down. But, I am clearly not alone… so, I definitely believe the market for a better sleep solution is huge! Part of the problem is ecosystem fatigue — sure, you need a good bed (and a sleep tracker like popular Eight Sleep offers) but the cost of top tech beds far exceeds $4k… furthermore, apps like Whoop and others all offer trade offs and monthly subscriptions for stuff that may not apply to you. This is (for me) what opens the door for Sleepspace, a singular, affordable sleep tracking app that focuses on improving your sleep by training new habits and being more purposeful.
Here's what I don't love: I would argue the need for a wearable is a hindrance, but tbh, who doesn't have some sort of wearable at this point?? According to Apple, they sold a watch to basically every human on Earth already… so, crisis averted. But, that just means every single wearable has all the more incentive to build its own sleep tracking app or system integration; that is my biggest concern for Sleepspace. I have zero concern about the founders, market size or price-point… The market is just very competitive and their solution (if they’re going to win) has to be the BEST option for the largest segment of the consumer pop.
Who should invest and why: If you have trouble sleeping, I think backing people working to solve your problems is always a good idea. And, at $10M value cap with $100 minimum investment, the deal is solid and affordable — but the competition is steep! For me, I look at this business as potentially a great acquisition for either a wearable maker (Apple, Whoop, Amazon, etc.) or even tech-enabled bed makers like Eight Sleep, Tempur, Casper, and Purple. There is also the opportunity for Sleepspace to go it alone and build additional product, but for my money I’d love to see them put the market to rest by rapidly growing active users and fill a gap for somebody with deeper pockets.
As always, startup investing is super high risk, anything can happen.
Invest in Sleepspace here 👉 Term Sheet
Questions, DM me 🤳 @kitun.