Marijuana Business Factbook 2019

292 Marijuana Business Factbook 2019 Chapter 7 | Cannabis Business Funding & Investing © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. CHART 7.18: Investors’ Primary Considerations When Evaluating Privately Held Cannabis Businesses Note: Multiple-choice question; respondent total may be greater than 100%. Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Investors' Primary Considerations When Evaluating Privately Held Cannabis Businesses Management Team Strength Realistic Business Plan Potential Of Company/Prominence In Industry Potential Size Of Return On Investment Timeline Of Return On Investment Defensible Assets Exist Pro Forma Financials Management Has Taken Investment Money In Past Historical Performance 83% 45% 41% 24% 17% 17% 14% 10% 7% Percent Of Investors By far the top consideration among investors when considering whether to invest in a privately held cannabis company is the strength of the management team. Investors often are investing in the people as much as ― or even more so than ― the product. This may be even more important as a growing number of major cannabis companies hire known talent from other industries ― including C-suite executives. A realistic business plan and the potential of the company or its prominence within the industry are roughly equal considerations for investors making an investment into a cannabis company. This speaks to investors’ desire for confidence in the company’s ability to bring its plan to fruition. Beyond these top considerations, investors are concerned with aspects of the investment itself: the size of potential return on investment, the timeline of return on investment and whether the company has defensible assets ― which can be considered as protection of return on investment as it relates to a company’s ability to liquidate assets to pay back debts if necessary.