11 August 2022 |

Special Edition: Lasso Investment Opportunity

By

Hello!

I am writing to you all from my hometown Cleveland, OH (most definitely not The Mistake on the Lake!)

Before we jump in, did you see the clip of the Pittsburgh Pirates player whose iPhone fell out of his pocket sliding into third…during a game! 

This could be one of the craziest things I have seen happen on a baseball field. 

That is a big statement if you would know some of the antics that my teammates performed during our record setting inaugural baseball season. 

Record setting in a bad way by the way. We were really really really bad. Like walked in a run on 16 straight balls bad.

Showtime!

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Leading Off: Wiz Reaches $100M ARR

The Rundown:

Wiz, a cloud security company, hit $100M ARR in just 18 months.

3 Key Points:

  • Wiz is the fastest company ever to hit the $100M ARR mark, beating out Deel according to Bessemer Ventures
  • Some of the company’s clients include BMW, Blackstone, Salesforce, Snowflake & more
  • The big VCs that are big winners here include Sequoia (seed round), Advent (Series B), Insight, and Greenoaks (Series C),

Key Quote:

“We believe [being a] quality company trumps pricing, and the difference is only time. And so a quality company will excel for the long term. And [regardless of what you pay], quality is how we have learned over the years we generate our greatest returns.”

-Doug Leone, Sequoia Capital & Wiz Board Member

Lasso: The Future of Compression?

Introduction

I am excited to introduce the very first private portfolio company of The Crossover Portfolio – Lasso! Below is a conversation with Lasso CEO Partha Unnava, where we discuss everything about the cutting edge compression sock company. 

A couple fun facts about Partha before kicking things off (pun as always most definitely intended): 

  • Partha is a Forbes 30 Under 30 Alum
  • President Obama recognized Partha for his impacts on the medical device space while he was in office! 

Pretty sweet. 

Partha rocking Lasso socks

The Interview

Alan: Partha! How you doing, man? Why don’t you start off by telling us a little bit about Lasso’s journey? 

Partha: So I started the brand after breaking my ankle playing basketball. As I was coming back from the injury, the best options to help support my ankle while playing were bracing or taping. I knew there had to be a better option than that so I embarked on the journey of creating the Lasso Sock – a sock that is constructed with patented compression technology that mimics the tactile benefits on the skin of what tape does. Basically, our socks help you improve how your body moves, and reduce pain from a variety of foot and ankle conditions. 

Alan: I just need to clarify, did you get your ankles broken on like a crossover or was it just a classic break? 

Partha: I stepped on someone’s foot so no it was not the embarrassing type of ankle breaking. 

Alan: Okay good. What type of traction has the Lasso sock received?

Partha: Last year, we did $1M in revenue of which 100% of sales were from ecommerce. Now we have transitioned into an omnichannel approach with a focus on getting to profitability. 87% of our new customers currently find us organically, compared to 12 months ago when only 13% of new customers found us organically. We have a clear path to profitability by Q4 of this year and already have trimmed our bottom line by 65% this year.

Alan: Why don’t you talk a little bit about the unit economics of the socks as that is something that to me is really exciting.

Partha: So we sell them for $30 and make them at a landed cost of $3.60. Socks we sell on e-commerce have gross margins of around 85-90% while wholesale margins are around ~70%. The margin profile is incredibly strong. 

Alan: Have any professional athletes or celebs taken a liking to the socks? 

Partha: Absolutely. From the moment we launched the product, due to the value of the compression technology, it exploded. Just 3 weeks after launch, our socks were worn on NFL fields by players like All-Pro Safety Earl Thomas. We have now moved into every major sport and have top athletes wearing it. 

Connor Mcgregor also organically posted a photo on his instagram wearing our socks. We also have many professional athletes that have been avid supporters and investors of our product like NFL Hall of Famer Champ Bailey and NBA Champion Andrew Bogut. 

I also want to note there is a really strong medical following for Lasso. The innovation represents a change to how we treat musculoskeletal injuries. Lasso socks have the potential to become a standard use product for every single foot and ankle injury that occurs not only nationally, but globally.

Alan: Love it. Thank you for the time Partha! Talk soon. 

Partha: Thank you Alan. Have a good day!

Connor McGregor’s insta post!

Alan’s Angle:

Lasso is the first of 4 private investments that we will be making from The Crossover Portfolio. The other 3 deals have also been completed so stay tuned!  

We have allocated $125K to these 4 investments & Lasso will be a $25K investment. 

We are participating in a convertible note @ a $16M valuation with a 10% interest mechanism. 

Why am I excited about this investment? 

1. Unit Economics – It is hard to make money when the core unit economics of a business are off and a whole lot easier when they are strong. Lasso with 85-90% gross margins gives the company significant flexibility on their path to profitability and beyond. 

2. Athletes & Their Bodies – Lebron spends $1.5M on his body a year. Russell Wilson $1M. For professional athletes, taking care of their body is #1 and they wouldn’t just wear/try anything to protect them. Earl Thomas, Connor McGregor, etc. are some of the greatest athletes in the world and the fact they wear Lasso consistently is incredibly bullish – and free eyeballs. 

3. Management – Partha’s resume and network precedes himself and this section could easily be dedicated to him. However, what I am most excited about is the company hiring John Wilson as COO. John has management experience at Reebok, Converse, Hanes, Colgate, and more scaling and managing P/&Ls up to $450M. John knows how to scale. What a great move by Partha.

4. Down Round – A few weeks back, when I was talking to CEO Nelson Chu of Percent, he mentioned that if he was active in the angel investing space he would be looking at established company’s raising at a down round impacted by changes in venture environment versus. This round is valued @ the company’s original seed valuation.

5. Medical Angle – Lasso has two key verticals to pursue: consumer & medical. Not only does this mean the business opportunity is that much bigger, but also thinking about the downside, if the consumer brand fails to catch on, the medical side of things can still become a strong business. 

6. Peter Lynch –  Legendary public markets investor Peter Lynch always discusses investing in areas where you feel that you have a comparitive advantage to others – an expertise from your real life experiences. For me, I feel so much of that is in the sports space and as you will see many of the private investments will be just there. 

7. FIGS compliment – We have discussed how we want FIGS to be the cornerstone of The Crossover Portfolio. Not only do I feel I can learn a lot about building a strong global apparel brand from Lasso on the grassroots level, but also, I think I can provide value to the Lasso team through my understanding of FIGS and how they are approaching their growth journey. 

Pitch deck: Click here

Contact Info: Shoot an email to [email protected] , and I will happily make the intro!

-Alan

The Crossover Portfolio

  • Since we last connected, we bought 700 shares of $PENN. After reading through the company’s earnings, I am excited about the company’s long term prospects as well as their prioritization of returning capital to shareholders. Breakdown coming soon. 
  • We will recognize Lasso in The Crossover Portfolio starting next week!

Golden Nuggets

  • After watching this speech by RB Jamaal Williams, I am ready to run through a brick wall
  • This level of sportsmanship in the Little League World Series is everything
  • Giannis is absolutely dominating in Greece for their national team. 31 points in 20 minutes!
  • Edwin Diaz and his brother exchanging lineup cards @ Citi Field is goals! Where are the trumpets?!
  • Especially today, I think I should have renamed this section “SportsCenter” instead of “Golden Nuggets”

Meme of the Day

Thanks for the read! Let me know what you thought by replying back to this email. See you in your inbox every Monday and Thursday.

— Alan  

Disclaimer: This analysis is for educational and entertainment purposes solely and is not professional investment advice. The author of this piece and/or members of Workweek media could be invested in companies discussed.