In mid May we launched our MicroVentures crowdfunding campaign to augment our traditional fundraising efforts. This article is a brief primer for why we chose crowdfunding in general, and MicroVentures specifically.
We have successfully raised institutional capital from traditional VCs in the past and know how much time and energy it takes. Regulation crowdfunding is fascinating because it democratizes equity investments and makes it more accessible by dropping the accredited investor requirement as well as the minimum investment amount to as low as $100. For those well steeped in traditional investing, you can roughly think of this as a really large SPV, managed by a 3rd party platform, with special reporting requirements to the SEC. When we were approached by MicroVentures, we thought there may be a good opportunity for us to try a non-traditional route for fundraising.
First and foremost, we are a data-driven company so we checked out past cannabis campaigns. Although cannabis crowdfunding got off to a rocky start, there have been a number of successes including PopCom (a fellow Canopy Boulder alumnus), HelloMD (with over 900 investors), Jane West, and QwikLeaf. There were enough success stories out there that we believed there was a viable opportunity to raise operating capital for our business.
Once we decided crowdfunding was an option, we reviewed the available platforms and found 3 dedicated to cannabis (CannaFunder, Fundanna, and 420fundme that has since gone out of business). We wanted to reach a network outside of those already involved in cannabis, so we looked externally to other non-cannabis platforms that have worked with cannabis companies such as Republic, Seed Invest, and Startup Engine. Ultimately, MicroVentures approached us directly to be their first cannabis crowdfunding campaign and we have really enjoyed working with their team.
For anyone interested in investing in Cannabis Big Data, please check out our live campaign here.
Overall, the process was very rigorous and detailed, and we are very happy with the final outcome. The due diligence on our two industries (cannabis + data) is thorough and clearly indicates how we fit into the puzzle and how our products and services add value to our customers. If nothing else, preparing for this offering was a very good exercise in getting ready for any institutional investor.
And we’ll wrap with a little bit of unsolicited advice: for those of you considering a crowdfunding campaign for your cannabis business, be prepared to spend a lot of time preparing your due diligence documentation as well as your investor deck and video. MicroVentures is very thorough in this affair and helped us understand each step of the process. Ultimately, you want all of your materials to reflect the caliber of your team and your offering, so make the time and space to put your best foot forward.
Do you have a clear idea of your current challenges and opportunities? We always love to hear from you on our contact page and are happy to give you an unbiased perspective on who will best serve your needs. If you’d like to chat about your specific business and needs, feel free to schedule a free data consultation.
We firmly believe that a rising tide lifts all boats, and if we can help you (and our data peers) succeed in this rapidly growing market, it is our honor and pleasure to do so.