Tue, 15 June 2021
Investor Perspectives – How to Solve the Cannabis Problem: Participation in the Cannabis Segment and What Investors Look for
This is Investor Perspectives, I’m the host of Investor Connect, Hall T Martin, where we connect startups and investors for funding.
In our new Investor Perspectives series entitled “How to Solve the Cannabis Problem”, you’ll hear about participation in the cannabis sector and what investors look for.
As the COVID pandemic passes, we emerge into a new world. The cannabis space is now undergoing tremendous change as we shift back to a normal way of life. Every state is reviewing its regulations and accelerating legalization across the board. We have investors and startup founders describe the changes coming up.
Our guests are:
William Muecke, Co-founder & Managing Director, Artemis Growth Partners, 00:56
Direct download: IP_Cannabis_Show_3_Participation_in_the_Cannabis_Sector_and_What_Investors_Look_For.mp3
Category:general -- posted at: 9:53am CDT
Tue, 15 June 2021
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
While traditional venture funds increase their fund size over time, corporate VCs should keep their fund size low.
Traditional VCs seek higher compensation and can do so by increasing the size of the fund which increases their management fee.
Corporate VCs are often compensated as employees of the company with some upside on successful outcomes which are not necessarily financial exits.
Collaboration, partnerships, and pilots are the most often used metrics for funded companies in a corporate VC fund.
Therefore it is important to keep the costs low especially at the start and then grow it over time as you prove out the program.
It will be easier to provide a positive return on investment for a $25M fund rather than a $200M fund.
This will reduce the dollar investment into each startup but there again, it’s best to start small and increase the investment per company over time.
A large fund may also draw criticism from other departments in the corporation who want that budget for their purposes.
A large fund can create a culture of “contracted labor” rather than a culture of collaboration.
The final outcome is not a financial return, but successful collaborations and pilots.
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