Marijuana Business Factbook 2019

293 Cannabis Business Funding & Investing | Chapter 7 © 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. MJBIZDAILY.COM CHART 7.19: Top Mistakes Private Cannabis Businesses Make When Seeking Funding, According To Investors 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. Top Mistakes Private Cannabis Businesses Make When Seeking Funding, According To Investors Baseless Financials Management Team Has Limited Relevant Education/Experience Inadequate Business Plan Not Acknowledging Competition/Barriers To Entry Grandiose Statements Unprofessional Behavior Or Appearance Undefined Ask Amount Underwhelming Pitch 67% 56% 52% 48% 26% 15% 7% 4% Percent Of Investors According to investors, baseless financials are one of the top mistakes made by private cannabis businesses when seeking funding, with more than two-thirds identifying this as an issue. As the industry has become more developed, more market and benchmark data for cannabis businesses has become available and more experienced investors have joined the ranks ― meaning a company’s financials must be realistic and well-researched to gain the support of potential investors. More than half the investors cited limited relevant education or experience on behalf of the management team, again speaking to the concept that investors are investing in the people who run the company as much as they are investing in the firm itself. Having an inadequate business plan and not acknowledging competition or barriers to entry were also cited by about half the investors as top mistakes. Together, these factors highlight the increasing importance of reasonable, well-researched business plans that include realistic financials and an honest analysis of potential threats to a cannabis business’ success.