How to Get Investors Interested in your Project
By John Schroyer Oct. 8, 2014 (excerpted from Marijuana Business Daily)
Investment money is finally flowing into the cannabis industry as the business risks subside and marijuana goes mainstream.
Scores of deep-pocketed investors are actively seeking opportunities to fund everything from dispensaries and grow operations to ancillary businesses that don’t directly handle marijuana.
“It’s like the perfect time to be raising capital, because there’s a lot of eager money out there,” said Troy Dayton, chief executive officer of the ArcView Group, which runs an investment network that has helped generate at least $14 million in investments into 28 companies over the past few years.
That doesn’t mean getting a hold of hundreds of thousands of dollars is as easy as showing up with an idea, however. One of the most crucial – and difficult – steps to landing financing is effectively pitching your business to potential investors.
Marijuana Business Daily reached out to three executives who landed money after presenting in front of investors at one of ArcView’s quarterly events, asking for their advice on what it takes to craft a successful pitch. Combined, the trio – Garett Fortune of FunkSac, Lauren Fraser of Auntie Dolores and Joshua Hill of Oil Slick – have raised almost $4 million from private investors in recent years to expand their companies.
Here are their top tips for a successful pitch:
Do Your Homework
Half the battle is tied to preparation.
Before pitching investors, make sure you have an extensive, detailed business plan. That means researching your market, knowing all your costs by heart, evaluating risks and crafting financial projections several years into the future.
And make sure you can fully explain how the desired infusion of capital fits into this picture.
“Be able to show what you’re going to do with their funding. Don’t just go in there and say, ‘I’m going to need a bunch of money for this,’” said Fortune, the chief executive officer of packaging manufacturer FunkSac, which raised roughly $600,000 from ArcView investors.
Establish a Track Record
Investors look to minimize risks. They’re much more likely to fund a company that’s already proven itself at least on a small scale vs. one that’s still only in the idea phase. This is especially true in an industry as complicated as cannabis, where laws and regulations vary dramatically by state.
You’ll likely get peppered with difficult questions after a pitch. It’s possible – even likely – that you won’t have all the answers, or that you’ll forget them in such a high-pressure situation.
Source: Marijuana Business Daily by John Schroyer 10.8.14 Reposted on CannabisConsumerResearch.com 11.26.14
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