Capital Rasing

Strategic and Financial Capital Placement

Connecting to 3 types of investor

We have deep relationship with angel investors, private equity, venture capital, corporate venture capital funds, and strategic corporate investors who are active in the cannabis industry or are seeking our counsel to enter the space.

Angel investors

Investment funds

Corporate investors

| Angel investors

Not only Capital, but Wisdom

The most promising capital partners for seed or pre-seed stage companies are angel investors. Some of them have valuable networks in the global cannabis industry and resources to optimize your business.

Investment funds

Variety of investment philosophy

Venture capital funds are one of the private equity funds specialized in the early stage startups. There are the other type of private equity funds which prefer later stage startups and actively perticipate in the business. Both of them make investment for capital gain from the future liquidity events like M&A or IPO, so there should be some exit plan. Unlike them, corporate venture capitals put capital for the future contribution to their businesses and no liquidation plan needed.

Corporate investors

Intelligence and collaboration

Corporate investors make investments for future contribution to their business. Some of them may want some valuable intelligence and others may want to be a regional exclusive partner of the start up. There is a great chance they make additional investments to aquire the startups in the future.

Frequently Asked Questions

In the best case scenario, raise capital when these three criteria are true:

  1. You have sufficient cash runway to provide you flexibility in the fundraising process so your back isn’t up against the wall (yes, that old adage ‘raise money when you don’t need it’ is true!). Runway = negotiating leverage.
  2. You’ve achieved the necessary milestones to get the valuation you think you deserve.
  3. You’re thoroughly prepared to deliver a pitch deck and efficiently respond to diligence requests.

While it’s certainly true that some companies can name their price, the reality for most startups is about taking the best offer the market delivers. Asking for a specific valuation can sometimes be a risky negotiating strategy. If you ask for a valuation of $x and the investors pass on the opportunity because they don’t think the company is worth $x yet, going back to that same investor with a lower valuation rarely leads to a different outcome.

Of course you want to be strategic about the amount of capital you raise, not least because of sensitivities about dilution. As such, you want to size the round in a way that gives you sufficient cushion to get to the next set of milestones and valuation inflexion points.

Debt can be a great source of capital when used appropriately. It can dramatically lower the overall cost of capital and provide a lot of financial flexibility.

But, it should be used judiciously because borrowing means you ultimately need to repay that debt … and the consequences of not repaying it are severe (i.e., bankruptcy). Remember: debt is a complement to, not a replacement for, equity.

Every company should be utilizing some sort of financial model or set of financial projections. Even if you’re at a super early stage, you should be managing to some sort of budget in order to understand cash burn and optimally time raising capital.

Understanding cash burn is one of the most important components of a financial model, and a robust model of cash burn includes detailed headcount-driven expenses. Understanding the unit-level drivers of revenue is also critical once a company crosses into the revenue generation stage. 

Capital Rasing