Capital Pipeline is offering equity at an $8.5 million valuation. The company is only about two years old and hasn’t generated any meaningful revenue. It’s not clear how well-developed its software-as-a-service tool is at this point. Those factors make an $8.5 million valuation seem high. However, Capital Pipeline is a tech company with an intriguing promise of aggregating complex data into a usable format. If the company finds product-market fit, it could scale quickly with reliable recurring revenue. That makes an $8.5 million valuation seem relatively fair, particularly given the overinflated valuations common for much less technically sophisticated companies raising a crowdfunding round. As such, Capital Pipeline’s price rating is right around average. 

Capital Pipeline is currently focused on addressing the architecture, engineering, and construction (AEC) market for public construction. The total amount of public construction projects in the US is a very sizable market: $302 billion as of 2018. The AEC industry that services those projects (and residential and commercial projects) is similarly large. The leading construction design firm in the US, Jacobs Engineering Group in California, brought in $13.6 billion in revenue last year.

While these metrics point to a large potential market of construction projects and bidders, it’s difficult to determine Capital Pipeline’s specific market size. Looking at it another way, Capital Pipeline will generate perhaps a few thousand dollars in annual revenue from each client. The universe of potential clients for Capital Pipeline’s specific tool is likely not huge. It seems safe to assume that there are a few hundred thousand total in the US, though many are likely too small to consider paying for Capital Pipeline’s product. If there are conservatively only tens of thousands of potential clients for Capital Pipeline and those are multiplied by a few thousand dollars in annual revenue per client, that means Capital Pipeline’s maximum projected annual revenue is roughly in the range of $100 million to $200 million. 

All in all, Capital Pipeline is adjacent to a highly valuable market full of giants that could easily become buyers.  But the company’s total universe of potential clients is niche, so Capital Pipeline’s maximum potential is lower than that of more generalized software businesses. As a result, the company’s market score is below average.

Capital Pipeline co-founder and CEO Stephanie Nelson is an experienced consultant with two decades of expertise working in the architecture, engineering, and construction (AEC) industry. Nelson assisted AEC firms with business development, so she has a deep understanding of the process of locating projects for bidding. Nelson also has more than two decades of experience as a political consultant, so she brings a helpful lens of public policy and government expertise that undoubtedly benefits Capital Pipeline’s work in managing government data. 

Co-founder, director and board member Joe Yuhas does not work full-time for Capital Pipeline. Yuhas is a public servant who held various local elected offices in New Jersey. These days, he is a public affairs and government relations consultant with decades of experience working with candidates, government offices, and private companies liaising with the government. 

The Capital Pipeline team also includes COO Robert Nelson, CMO Deirdre Booth-Gilmore, and Vice President of Sales Terrence Donner. COO Nelson works part-time for Capital Pipeline. He was previously the COO of The Pacific Institute and Inside Results, organizational performance education and consulting companies. Booth-Gilmore also works part-time for Capital Pipeline. She owns a marketing consultancy firm and has a decade of experience doing marketing partnerships with real estate and construction firms. Donner works full-time for Capital Pipeline. He previously worked for six years as a district sales manager for Conn’s HomePlus, a furniture store. 

Capital Pipeline is led by an experienced team of professionals with deep experience in both the AEC and government relations industries. Each team member has many years of experience in their field, some up to decades of experience. It’s worth noting that the company’s co-founder, COO, and CMO are only part-time, which limits their day-to-day contributions. The Capital Pipeline team also lacks deep technical expertise, which will be vital as the company continues to grow and develop its sophisticated software product. With those small caveats aside, though, this team has the industry-specific experience needed to grow a business in the construction market. Therefore, Capital Pipeline’s team score is relatively high.

It’s difficult to measure Capital Pipeline’s extent of differentiation at this early stage, as the company’s software product does not appear to be fully developed yet. However, Capital Pipeline’s proposed solution would provide a significant improvement over existing methods of locating public construction projects. It’s frustrating to navigate the inefficient bureaucracy of government websites, and trying to derive any meaningful insights from thousands of scattered PDFs is nearly impossible. If Capital Pipeline can successfully aggregate this data and provide an easier way for construction firms to browse and analyze construction projects, that could be a major differentiator. 

In addition, no other companies seem to be building a similar product in this space. There are other business intelligence tools for more generalized use, but none offer the specific public construction dataset that Capital Pipeline is focused on. Therefore, Capital Pipeline appears to have a first-mover advantage in this niche specialty. 

Given the potential that Capital Pipeline has to significantly improve a core workflow for architecture, engineering, and construction firms bidding on public construction projects, the company’s product seems to be differentiated from (the lack of) existing solutions. As a result, Capital Pipeline’s differentiation rating is above average.

Capital Pipeline is an early-stage company with relatively little in the way of performance to evaluate. The company generated $17,688 in revenue in 2020. Understandably, the company’s biggest expense last year was research and development. Thanks to spending nearly $200,000 on that, Capital Pipeline posted a net loss of roughly $176,000. 

Traction-wise, Capital Pipeline has brought in a few early users and cemented a partnership with Automation Anywhere to augment its document processing capabilities. Beyond these early steps, though, Capital Pipeline hasn’t yet proven much in the way of product-market fit. As a result, the company’s performance rating is below average.

Capital Pipeline’s primary risk factors are time, funding, and investment terms. Regarding time, it seems that Capital Pipeline has a long way to go before fully realizing its vision for a comprehensive data aggregation and analysis platform. Without senior technical talent on the team, it could take years to produce a compelling product. Relatedly, Capital Pipeline has no funding history. The combination of a potentially long time horizon and minimal funding sources could pose an issue. There’s also a risk to investors with investment terms. This round’s valuation seems a bit high for Capital Pipeline’s current stage.

Capital Pipeline’s vision for aggregating data hidden under layers of government bureaucracy is a compelling one. However, this is a very early-stage company with little to show in the way of traction, let alone product-market fit. Capital Pipeline doesn’t share much about sales prospects in the coming year, nor much about its plans to continue refining its product to become more compelling for clients. Without any in-house engineering talent, Capital Pipeline could take a long time to finish its product. 

It’s also worth noting that Capital Pipeline’s current product is relatively niche (serving the architecture, engineering, and construction industry for public construction projects), so the stakes are high for Capital Pipeline to find a tight product-market fit among that niche. If it turns out that its target clients aren’t willing to pay for Capital Pipeline’s tool, the company would need to pivot quickly to leverage the same type of technology for other use cases, which might be difficult with minimal staff and funding resources. Overall, it’s simply too soon to say whether Capital Pipeline can revolutionize the search for public construction projects.

Capital Pipeline offers a simple, compelling promise. Construction firms need to be able to find public construction projects to bid on. In aggregate, those projects are a multibillion-dollar opportunity. But it takes painstaking research on county, city, state, and federal government websites to locate unhelpful documents about the projects, severely limiting firms’ ability to make money. If Capital Pipeline can achieve a future where firms can simply punch in a few search criteria and receive a list of projects that work for them, it would be an extremely compelling product. 

It’s too soon to tell whether Capital Pipeline’s vision can become a reality. With little revenue and few users, there’s no proof yet that Capital Pipeline can revolutionize its industry. However, the company is led by a group of seasoned experts that are well-equipped to locate an opportunity in this space. With decades of combined experience in construction bidding and government relations, working directly with the types of clients that Capital Pipeline will serve, this team seems prepared to take the long journey of bringing this product to market.

Capital Pipeline is a public data aggregation and analysis company helping architecture, engineering, and construction firms find public construction projects to bid on. In the future, Capital Pipeline’s method of surfacing and structuring complex data could be extended to many other business intelligence use cases. Capital Pipeline is led by a team of seasoned construction and public sector professionals, and the company has the potential to revolutionize the way that public construction data is accessed. 

Capital Pipeline is also a very young company with little revenue thus far. There’s no proof that the construction industry actually needs Capital Pipeline’s tool. With no in-house engineering talent and no funding history, the company might take a long time to develop the kind of sophisticated, disruptive product it envisions. Therefore, Capital Pipeline has been rated a Neutral Deal. 

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