You might be asking: “How do you get a $10 million valuation cap as a pre-revenue company?”
Firstly, for those who haven’t read my update titled What is a SAFE?, I want to elucidate the difference between a valuation cap on a SAFE and a formal valuation:
A formal valuation = the business is worth X amount. We are absolutely not making the claim that Manna in its current state is worth $10 million. For a pre-revenue company, establishing a formal valuation of any kind is difficult, and this valuation would be very high.
A valuation cap is a mechanism in SAFE style fundraising that sets an absolute maximum valuation at which our WeFunder investors can buy shares when our formal valuation is established in the next round of fundraising. For example, if Manna is valued at $5 million next round, WeFunder investment would convert into equity at $4 million total valuation (because of the 20% discount on our SAFE).
In the inverse scenario, if our business gains massive user adoption in the coming months and got valued at $50 million at our next round, Wefunder investors would have their shares still convert at $8 million (10 million max valuation + 20%), and early bird investors would convert at $6 million (8 million max valuation + 25% discount). These maximums help reward and protect investors who invested early.
We picked an ambitious valuation cap because we believe that Manna has significant strategic advantages against competitors in the landscape, including:
Recency advantage: The majority of our competitors are built on old legacy technologies from 7-10 years ago, while we’re built using cutting edge tools. Our app is designed to cohesively feed into itself for all steps of the cooking process from inspiration, to creation, and ultimately sharing. Much of the interconnected functionality with our backend and search is only possible today and it’s logistically difficult for competitors to adapt.
Manna Scanner and recipes as data: Our recipe scanner offers a unique value proposition: take the recipes from the sites you already like and paste the url straight into Manna. Our database automatically analyzes the recipes as data, and parses out the ingredients, quantities, and preparation instructions into our universal format. From there users have full control and can customize and organize the recipes in any way they like. Manna is the only app on the market that gives users this kind of customization power, and our scanner means that our database of user driven content is ever-expanding.
Community advantage: Food is one of the most popular content groups on social media platforms, but there’s no way to actually engage with the content. If a chef/influencer you like posts a cool recipe, your best option is to screenshot the instructions and try to emulate it. On Manna you can click any recipe that’s shared on our social feed and add it straight to your cookbook. You can also find new recipes through our recipe swipe mode (think Tinder for food). Competitor food apps simply don’t have these features because of a lack of incentive. Publishers achieve their mission once you look at their recipe, and most other repository apps are designed as a solo experience. We believe, however, that having an engaged social environment dedicated to food offers unique opportunities to foster communities of home-cooks, driving engagement and adding value to the user experience.
Thanks for tuning in. Please share Manna with your friends: Manna Wefunder
– Josh Abady | Co-Founder + COO