Having the right leaders in place is crucial as cannabis companies move from bootstrapped operations to startups funded by cannabis venture capital (VC).
Seeking cannabis funding may present challenges founders aren’t accustomed to, including working with outside investors who may not be familiar with the industry and finding VC firms amenable to cannabis funding.
Hiring the right leadership to address these challenges, with experience working with venture capital firms in other industries, can help get your business the money it needs to blossom and grow.
Understanding the characteristics and qualities that will appeal to cannabis venture capital companies, so you’re hiring for the right personality fit and skillset, not just prior experience, can lead to success.
It’s also important that cannabis leaders know how to leverage funding to make the most of their partners’ investments.
Challenges To Seeking Cannabis Funding
Venture capitalists understand that funding any bootstrapped startup represents risks.
But putting venture capital into cannabis poses unique challenges that are unlike in any other business. “Perhaps the biggest difference is we’re still against federal law,” says Andrew DeAngelo, cannabis activist and leader. “It’s one reason why a lot of ambassadors are not in the space right now.”
While some VCs see this as an opportunity, others perceive cannabis to be riskier than other ventures for that reason. “A lot of people choose to invest in a packaging company, or a tech company, or any company that’s not actually growing, transporting or distributing cannabis.”
That doesn’t mean it’s impossible to secure cannabis funding; it just means leaders need to know how to tell the story of their company well, along with the history of the industry, and give the right investors a compelling reason to take a chance on them.
Chris Finelli, Managing Partner at Phoenix Distributors, a sales and marketing as a service company for the cannabis industry, said that cannabis companies may have more success pitching high net worth individuals, family members and those in their network who are already open to …