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One of the biggest problems that cannabis companies face is capital. Banks do not want to work with cannabis companies because cannabis is still illegal at the federal level. Every problem has a solution and CannaFundr has an answer for this problem. CannaFundr offers startup companies access to capital through investments by accredited investors.
What is CannaFundr?
CannaFundr is an online crowdfunding platform for accredited investors that want to invest in a cannabis company. CannaFundr is owned by CrowdFundConnect and the company is headquartered in Chicago. The company has expanded its presence and they now have offices in Florida, Michigan and New Jersey.
CannaFundr provides fund administrative services to lead investors. Investors do not invest directly in the issuer, they invest in a single purpose fund that has a qualified lead investor acting as the fund general partner and investment advisor.
Not your typical investment fund
CannaFunder is an attractive program for accredited investors. It differs from other investment funds in the way that it is structured and the minimum required investment.
Most investment funds charge its accredited investors a membership fee; CannaFundr does not. Also, most investment funds require at least a $50,000 investment. CannaFundr funds have a $2,500 investment minimum.
What qualifications do companies need to enter the program?
Any company can apply to CannaFundr. If a company wants to be considered as a possible investment, they need to provide CannaFundr with a pitch deck and an executive summary. It is in the company’s best interest to provide other materials (i.e. income statement, balance sheet, goals and expectations) if they have them, but only the pitch deck and executive summary are required.
How many accredited investors are in CannaFundr’s network?
CannaFundr does not release the number of accredited investors it has in its network. The company has investors both online and offline. The lead investors reach out to offline investors when investment opportunities arise. CannaFundr is on track to have more than 1,000 accredited investors in their network during the first year.
How many companies is CannaFundr involved with?
CannaFundr’s lead investors are involved with five companies. These companies have received nearly $1.5 million in aggregate from investors. A sixth company was purchased outright by a lead investor for an undisclosed amount.
The five companies have also received direct investments from investors outside of CannaFundr’s system. The total amount invested into these companies exceeds $4M.
What is the pitch process like?
The companies that go through CannaFundr’s system pitch their business through an online webinar. The first step in the pitch process is for the company to send in their materials (i.e. pitch deck and executive summary). An internal staff member will review the materials and the company will then pitch their business to CannFundr’s internal team. After that, the company pitches to CannaFundr’s lead investors.
If a lead investor is interested, they will negotiate a term sheet with the issuer. At that point, CannaFundr will set up a webinar with the company and accredited investors. To ensure that they are compliant with SEC regulations pertaining to setting up investment funds each fund is limited to 100 investors.
How do I sign up?
If you are interested in pitching your business to CannaFundr check out their website http://cannafundr.com/ and become a registered member! You can also reach the company by calling them at (312) 957-8553, or emailing them at questions@cannafundr.com.
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