Sherri Haskell’s favorite type of leadership blends legacy expertise with a mainstream business mindset.
“What I have found to be a particularly successful combination is if we can put legacy founders together with – for lack of a better term – Wall Street acumen and integrate the two cultures so they are synergistic,” said Haskell, an award-winning investor who in 2017 launched Canna Angels, an angel investor consortium that’s funded more than 50 cannabis-related businesses.
“Some of my very best companies have been able to integrate the legacy people with either Wall Street or big national players that have the business acumen and the track record of education and experience to bring to the table.”
Beyond that, Haskell likes to see founders who know how to surround themselves with talent and investors and who show they can take the company further.
“What we really want to see is who’s sitting at the table, who is working with this company to help them, who’s had exits in the past, who can bring a certain amount of value to each one of the companies,” Haskell said.
Like other investors, Haskell spoke of the importance of moats, which she defined as “protection primarily to their differentiator, their technology, their strategic advantage.”
“We really need to identify what can differentiate this company from potential competitors in their space, and then we can amplify that to the capital markets, to their potential clients,” Haskell said. “Sometimes it has to do with technologies. Sometimes it has to do with procedures. It may have to do with formulations and genetics.”
She added: “I think without differentiating yourself and having something to build upon, monopolize and capitalize on, I think that you are just another ‘me too,’ and we’re not very interested in those companies.”
The first thing a company needs to scale is knowing what it’s going to look like a year or two ahead.
Haskell asks founders about whether the company plans to scale nationally or globally and whether it has patent protection.
“We really look at what are the opportunities for scalability. … It’s great if you’ve got a nice regional business, but most of our investors are looking for tremendous ROI and home runs.”
Data and financials
To get familiar with potential investments, Haskell signs nondisclosure agreements so she can examine companies thoroughly, especially their data and financials.
Specifically, she looks at their data, governance, technology systems they’ve integrated and preparedness for due diligence.
“That gives us an idea as to how mature they are,” Haskell explained. “We not only look at what the financials are year-to-date or time-to-date, but we question them on their projections.”
Reasonable valuations are also important to Haskell, who said she often finds herself talking executives out of inflated valuations.
“I did this just a week ago. I say to the CEO of the company: ‘Let me just ask you very seriously: What’s more important to you at this point in time? Is it the value or getting the money?’ It doesn’t take them long to understand that it’s more important to get the capital in the door. And if they get the capital in the door, and they are strategic and committed and dedicated to making this business grow, the valuation will come,” she said. “But if you’re ego-driven, and that valuation is so important to you, you’re shooting yourself in the foot.
Follow the links on this page to learn what other investors look for when making funding decisions.