We get a lot of questions from people about our investing activities who are looking for us to consider investing with them. We put together a F.A.Q. that may help you understand our approach and how to work with us. so to make things easier, here are the frequent questions we get.
Q: How do I send you my business idea?
A. Don't send it unsolicited; seriously. We see a lot of proposals and sometimes the idea you are passionate about is something we are working on already or one of our companies are working on it or worse, we are under an existing NDA with a portfolio company or prospect that may conflict with your idea. Send us an email to start the process of connecting with us, but don't send complete business plans or financial data.
Q: I see you invest in cannabis and CBD. Can I tell you my great idea for a cannabis business?
A. Sigh. We get this one a lot. Short of building a time machine and going back to 2013, we don't see any true ground level opportunities and are fully invested in a multi-state brand that we feel is our best play here. We think there are a lot of opportunities remaining around distribution and pharma-research in Cannabis, but those investments are capital intensive and outside our model.
Q. Speaking of model, what are you looking for?
A. Glad you asked. we have a specific point of view on this. First, we look for seed capital opportunities where we can make a difference in the financing of a new business as well as have a hand in the structure and model of the business; half of our value is our background in sales and marketing so we like to be able to help our businesses grow faster. Second, we look for products and services where the demonstrable value is clear early in the sales process - building a $20m SAAS service before $1 of revenue isn't our model at all. Third, we look to come in before venture capital or traditional financing, but look to help companies with their raises, either as investors or board members or both.
Q. Do you have any hard and fast rules for investing?
A. Just a couple and they are pretty simple:
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Don't get into farming. It's a horrible business
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Don't give your money to assholes. It never works out for anyone, including the world
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If the CEO/Owner doesn't wake up every day with a pathological desire to work for customers benefit, run
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Don't give equity to friends automatically - everyone on the founding team earns their shares over the first two years
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If we can't get five random friends excited about the business in a short chat, then either it's too complicated to work or not compelling
Q, Can you help my company out without investing?
A. Sure, let's chat. We often see companies that have technical founders who have already been successful, but are struggling with their product/market fit, pricing or packaging models, sales execution, top of funnel, messaging, and a myriad of other challenges we can help with. We work in those cases on an earned equity basis or a mix of cash and equity, depending on the funding model of the company.
Q. Is there anything in the financial profile of the company you are looking for?
A. Absolutely. We are fans of brutally capital efficient companies and seek to build a plan that quickly gets to market with a viable product to test the markets willingness to pay as well as the companies discipline in converting interest to orders and orders to cash. We work closely with founders and leadership teams that have equity stakes in the game and aren't looking for companies where a significant portion of the equity is already invested by non-operators, like investment funds or venture capital investors. There is nothing wrong with this approach to financing, it's just usually by the time a company has raised a series B or C, we are being called to help with a pivot, not a launch and the economics of participation change to a mix of cash and equity for us.
Q, How come you guys have something like 5 different email addresses?
A. When we say we take on operating roles at the companies we invest in, it's what we really do - we aren't non-participatory board members that you see once a quarter, but daily members of your team at key moments that matter. So, to keep us close and using the same tools at the team, you may see us with email addresses and job titles from multiple companies - it's part of us playing multiple roles in our investments and being fully committed to the teams we work with.
Q. Are you looking for more hospitality investments?
A. Sure, but the bar is really high. We've been successful in this because of a set of firm rules about who we invest with, what their goals are for their customers and their own ethics and drives to take on some of the hardest work in the world - creating joyful experiences that let others escape. If you think you have a good opportunity for us to chat about, drop us a line.