Downstream Systems, Inc.
Digital Marketplace for Jobsite Equipment Rentals & Services · Frisco, TX
GSV Total Invested
$2.2MSTS
$200K SAFE + $2M Seed
Seed Pre-Money
$15.0MSTS
$1.4057/share
Series A Pre-Money
$25.0MATS
67% step-up
GSV Ownership
12.09%CT
FD post-seed
Series A Raise
$8.0MATS
B&M + Moneta co-lead
Investment History
Investment Timeline
Source: SAFE Agreement (Feb 2024), Seed Term Sheet (Jun 2024), Series A Term Sheet (Sep 2025)
Sep 2022 – Jul 2023
Pre-Seed SAFEs — $920K
11 SAFEs from Incandescent LLC, Luke Sherwin, Zachary Irwin, Dean McArdle, Jovan Willford. Caps at $5M-$6M with 20% discount. Originally under "Trash Gurus Technology" entity name.
Feb 2024
2024 SAFEs — $550K
GSV Investors II LP: $200K at $7.5M post-money cap, 20% discount. Also: Victorum ($250K), Incandescent ($100K), Yonder Ventures ($70K).
Jul 2024
Series Seed — $2.5M New Money
GSV leads: $2.0M in two $1M tranches. Other investors: $500K. $15M pre-money. All SAFEs convert to Seed-2/3/4 Preferred. Total authorized: 22M shares.
Sep 2025 (Pending)
Series A — Up to $8.0M
Co-led by Brick & Mortar Ventures ($3.5M) and Moneta Ventures ($3.5M). $25M pre-money, $1M from existing investors. Board expands to 5 seats.
Valuation Progression
Note: No revenue or financial data is available in the provided documents. This Deal Memo is based entirely on investment documents, term sheets, and cap table data.
Investment Structure
Deal Terms — Seed & Series A
Source: Seed Term Sheet (Jun 2024), Series A Term Sheet (Sep 2025), SPA, Warrant Agreement
Series Seed — Closed Jul 2024
SecuritySeed-1 Preferred ($1.4057/sh)
Pre-Money Valuation$15,000,000STS
New Money Raised$2,500,000
GSV Investment$2,000,000 (2 tranches)STS
Dividends8% cumulative non-compounding
Liquidation Pref1x non-participatingSPA
Anti-DilutionBroad-based weighted avg
Board (Seed)2 Common + 1 Preferred (GSV)
Mandatory ConversionIPO > $30M gross
Founder Comp Cap$250K per founder
Series A — Term Sheet Sep 2025
SecuritySeries A Conv. Preferred
Pre-Money Valuation$25,000,000ATS
Total RaiseUp to $8,000,000ATS
Lead: Brick & Mortar$3,500,000
Lead: Moneta Ventures$3,500,000
Existing Investors$1,000,000
Liquidation Pref1x non-participating
Board (Series A)5 seats (2C + 1 B&M + 1 Moneta + 1 At-Large)
Option Pool12% FD post-close
Mandatory ConversionIPO > $75M gross
GSV Common Stock Warrant
Shares: 177,846 CommonWA
Exercise Price: $1.1246/share
Basis: $200K at $12M FD val
Expiry: 5 years (~Jul 2029)
Capitalization
Cap Table — Post-Seed Pro Forma
Source: Pro Forma Cap Table, Certificate of Incorporation
| Holder | Outstanding | FD % |
|---|---|---|
| Zachary Irwin (CEO) | 6,255,865 | 39.46% |
| GSV Investors II LP | 1,917,431 | 12.09% |
| Incandescent LLC | 1,898,153 | 11.97% |
| Justice Baird (Co-Founder) | 899,500 | 5.67% |
| Victorum Venture Fund I | 792,016 | 5.00% |
| Eric McGlauflin | 481,013 | 3.03% |
| Luke Sherwin | 467,673 | 2.95% |
| Mithun Banarjee | 394,350 | 2.49% |
| Other Seed-1 Investors | 355,695 | 2.24% |
| Tate Hayes | 313,402 | 1.98% |
| Other holders + options | 810,004 | 5.12% |
| Available Option Pool | 1,268,270 | 8.00% |
| Total FD | 15,853,372CT | 100% |
Ownership Distribution
Company Overview
Product & Market
Source: Closing Docs
Downstream operates a digital marketplace for jobsite equipment rentals and services in the construction sector. Customers can book equipment (portable storage containers, portable toilets, roll-off dumpsters), manage deliveries/swaps/removals, and track spend — all via mobile app (iOS/Android) and web platform.
Business Model: Two-sided marketplace connecting jobsite customers with equipment suppliers. Revenue generated from transaction fees on equipment rentals. Platform includes supplier partnerships, broker referral program, and loyalty program ("Downstream Forge" — up to 5% cashback).
Coverage: Nationwide across 14+ states including AZ, CA, CO, FL, IL, IN, KS, KY, LA, MI, MN, MO, OH, and TX.
Enterprise Customers
Walmart
Target
Lowe's
Samsung
Bank of America
Pizza Hut
Planet Fitness
Financials Unavailable: No revenue, ARR, or P&L data was provided in any source documents. The investment thesis is evaluated based on deal structure, investor quality, and market positioning only.
Risk Assessment
Key Risks & Concerns
Source: SPA, Cap Table, Series A Term Sheet
▲ HIGH
No Financial Data Disclosed: None of the source documents contain revenue, ARR, burn rate, or financial statements. Unable to assess unit economics, runway, or growth trajectory.
▲ HIGH
GSV Loses Board Seat at Series A: GSV held the Preferred Director seat at Seed. At Series A, board expands to 5 seats with B&M and Moneta taking the investor seats. GSV's governance influence diminishes significantly.
MEDIUM
Entity Rebrand / Pivot: Company was originally "Trash Gurus Technology" (waste management). Pivot to "Downstream Systems" (broader construction services) represents strategic shift — execution risk on the expanded vision.
MEDIUM
8% Cumulative Dividend on Seed: Unusual for seed stage. Accrues whether or not declared, increasing liquidation overhang. Note: Series A term sheet explicitly states NO accrued dividends — creates priority tension between Seed and Series A Preferred.
MEDIUM
Heavy SAFE Dilution: $1.47M in SAFEs converted to 3.2M Preferred shares at $0.49-$0.63/share — a significant discount to the $1.41 Seed-1 price. Incandescent LLC alone holds 11.97% without a board seat.
MEDIUM
Founder Compensation Cap: $250K per founder requires Board approval to exceed. May create retention risk as company scales.
LOW
Founder Concentration: Zachary Irwin (39.46%) and Justice Baird (5.67%) are both "Key Holders" — company depends heavily on both remaining in service.
Leadership
Team & Board
Source: SPA, Closing Docs
ZI
Zachary Irwin
CEO & Co-Founder · 39.46% FD
Largest common stockholder. Key Holder under both Seed and Series A agreements. Email: zirwin@trydownstream.com. Address: 4230 Bourbon St. Unit 103, Frisco, TX 75024.
JB
Justice Baird
Co-Founder · 5.67% FD
Second-largest common holder. Designated Key Holder in Series A term sheet alongside Irwin. Both must provide continued services for drag-along provisions to apply.
AY
Austin Yount
Series A Board · Brick & Mortar Ventures
Initial B&M Director. Brick & Mortar Ventures focuses exclusively on construction technology. Observer: Darren Bechtel (Managing Director).
AH
Aasim Hasan
Series A Board · Moneta Ventures
Initial Moneta Director. MV Fund III includes SBIC-backed vehicles (SBA guaranteed). Observer: Arjun Hegde.
GSV Team: Dougal Cameron (Manager, signatory on Seed docs), Andrew Smith (Executive Director, signatory on SAFE). Fund counsel: Clare Reilly, Walker Eisenbraun LLC.
GP Recommendation
Recommendation: PROCEED — $2.2M Total (SAFE + Seed)
Downstream Systems represents a marketplace play in the fragmented construction jobsite services market. The company serves enterprise customers (Walmart, Target, Lowe's) through a digital-first platform for equipment rentals — a category that remains largely offline. The 67% valuation step-up from Seed ($15M) to Series A ($25M) validates early traction. Two domain-expert institutional leads at Series A (Brick & Mortar Ventures in construction tech, Moneta with SBIC backing) provide strong signal. Key concern: no financial data has been shared, making it impossible to assess unit economics or runway. GSV's board influence diminishes at Series A. The investment is justified by the repeat investor confidence, market opportunity, and entry price — but financial transparency should be a priority ask.
Investment Summary
SAFE: $200K (Feb 2024)
Seed-1: $2M (Jul 2024, 2 tranches)
Warrant: 177,846 Common
Total deployed: $2.2M
Seed-1: $2M (Jul 2024, 2 tranches)
Warrant: 177,846 Common
Total deployed: $2.2M
Key Milestones
Series A close ($7-8M)
Revenue disclosure & KPI reporting
National coverage expansion
Platform GMV growth
Revenue disclosure & KPI reporting
National coverage expansion
Platform GMV growth
Priority Action Items
Request financial reporting
Assess pro-rata in Series A
Monitor board seat dynamics
Evaluate construction tech TAM
Assess pro-rata in Series A
Monitor board seat dynamics
Evaluate construction tech TAM
Source Documents
SAFE SAFE Agreement — Feb 2024
STS Series Seed Term Sheet — Jun 2024
ATS Series A Term Sheet — Sep 2025
SPA Stock Purchase Agreement
CT Pro Forma Cap Table
COI Certificate of Incorporation
WA Warrant Agreement
CD Closing Docs
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