Tips to Find Investors for Your New Cannabis Business
An article in High Times talked about how a cannabis business owner can receive investment funding. The article featured the basics on securing funding from outside. If featured five tips you can use to get starting finding investors for your cannabis business. The article stated that there are many investors just dying to get in on the ground floor in the legal marijuana business.
The tips listed in the article is nothing special, however. These tips are no different than any other type of business trying to secure investing of a start-up business. The five tips contain effective strategies and they prove one point. Other than federal prohibition, businesses specializing in cannabis are no different than any other type of business.
The main difference between investing in a cannabis business is it comes with a host of complicated compliance, regulatory and operational issues that are unique to this industry. For example, cannabis businesses face taxation, intellectual property concerns, employment challenges and the need for real property. These issues can cause investors to question if they should invest in these properties and how much they should be willing to invest in this type of business.
The following five tips will help you secure outside funding for your new cannabis business. Continue reading to learn more.
- Preparation is Key
- The Importance of Your Track Record
- Be Honest
- Keep It Simple
- Know Your Goals
Before you talk to potential investors, you must complete a comprehensive business plan. The business plan should include project costs, financial projections, associated risks and the assessment of the marketplace for the next five years. This information will show investors how you will be using your funding and how the monies will help your business grow. An attorney specializing in the cannabis business is also a must.
You should work hard to develop and establish a relationship with your attorney to ensure all legal issues are explored before seeking out investors. Investors are much more likely to take your business presentation seriously if you have consulted an attorney and fully understand all of the legal ramifications associated with a cannabis business.
Investors prefer to invest in a company with a proven track record. They want business owners who have made significant investments of their own, including financial investments and sweat equity.
Investors are professional business men and women who know a con when they are presented one. This means you cannot sway them with smooth talk. Most investors will only invest once they have received all relevant information and have completed some homework themselves. The worse thing you can do is make an investor feel like he or she cannot trust you.
When you are presenting your proposal, keep it short. You should be able to present your proposal within five minutes. This allows the rest of the appointment time to address any questions and concerns the investor has.
You must know what you want from your company and your investors. By having a clear plan and staying on point, you can ensure your company is successful and your investors will feel safe investing in your company.
Cormac Reynold writes for Kratom Nation and has written about the cannabis industry for a number of years now.