(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the cannabis industry. Helaine Krysik is the founder of Illinois-based cannabis lifestyle brand potinillinois.com.)
One of the most positive developments in the cannabis industry over the last several months is bigger and better career opportunities available for women.
Historically, the young legal cannabis industry has been male dominated, particularly in the C-suite. The good news is this trend is changing rapidly.
And one of the areas in which we’re seeing that change is in funding resources for female founders.
Below I talk about the obstacles and how women can take advantage of the new funding opportunities.
How difficult has it been for women to get funding?
According to the Harvard Business Review, 2.8% of funding in 2019 went to women-led startups. In 2020, that number fell to 2.3%.
Why are these numbers so low, and why has it been so difficult for women to get funding?
The main theory is simply that men in venture capital tend to fund other men, and it’s a pretty tough boys club to break into.
So what’s changing, and how can women in cannabis capitalize on this?
We’re starting to see more incubators and accelerators designed specifically for female founders.
If you’re a female founder with a promising startup and you can get into an incubator or accelerator specifically for cannabis, that’s a great way to potentially secure seed funding – or start to make great contacts that will lead in that direction.
What’s the best way to get into one of these programs?
If your startup is already generating revenue, and you can prove that you can scale substantially, you have a huge advantage.
Or, if your startup has proprietary IP or a similar competitive advantage, that will also help you – even if you’re not yet generating sales.
Below are a few examples of incubators and accelerators for female founders:
Fluresh is a cannabis brand that launched a Michigan-based accelerator in conjunction with community partners, intending to increase access and equity in the cannabis industry.
While it is open to any individual who is a legal resident of Michigan 21 or older, the program strongly places emphasis on social equity applicants and women.
This program provides founders with education, mentorship and seed investment from seasoned entrepreneurs who have successfully scaled a business, focusing on women and minorities.
One of the original cannabis accelerators for women, this program out of Oregon holds a business boot camp, providing funding resources for female-founded cannabis businesses.
While this accelerator has not been active during COVID-19, it’s definitely worth considering when it starts accepting applications again for upcoming cohorts.
If you have an advanced startup that already has some traction, and you’ve gotten past the seed stage, you may be ready for venture capital.
An example of a cannabis VC firm geared toward women is the Treehouse, a fund comprised of a group of female investors with more than 10 years of experience in the legal cannabis space.
If you have a cannabis startup that has a clear value proposition and scalability and you’re generating $500,000-$1 million in revenue, reach out to them to see if there’s a potential fit.
But what do you do if you don’t yet qualify?
If you’re a female founder whose startup doesn’t have any of the above factors yet going for it but you strongly believe in what you’re doing, you still have other options.
This is actually a great time for you to network, build relationships and learn everything you can about growing your business.
Here are two ways to do that:
Trade groups are a great way to advance your career in cannabis, even if you’re not a startup founder. You can find many groups that operate nationally, regionally and locally. Some examples are Women Grow, Toketivity and Supernova Women, all of which provide networking resources and ways to get involved in the industry.
Getting on a committee and contributing to a trade group’s goals is by far one of the best ways to develop real, organic relationships with other women in any industry, especially one as young as cannabis.
Doing so will enable you to develop community, advance mutually beneficial causes and expand your network. You will have a chance to get to know investors, and they can learn about your journey and your business as it grows.
Nonprofit organizations such as WBENC can also be a great resource for female founders.
WBENC’s main goals are increasing supplier diversity and investing in the development of women-owned businesses as suppliers. The group provides educational content, programs on potential microloans, networking, certifications and more.
Many of them also have cannabis specific programs, which can be ideal for founders just getting started.
With all of that said, the single best way to attract investors is to simply prove you don’t need them.
While it’s not always possible, if you are capable of bootstrapping and scaling your company on your own, by all means, do this first – for as long as you can.
Not only will investors eventually hear about your business and find you, rather than you having to seek them out, you’ll also be negotiating from a position of power.
In addition, you’ll have much more leverage in terms of how much equity you give up, what kinds of returns you need to deliver and other crucial factors when it comes to taking outside money and the future of your company.
The previous installment of this series is available here.
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