Raising Cannabis Capital 0082: MicroVentures

The "Cannabis Investor Spotlight" is shinning on MicroVentures.  Brett Andrews speaks with Dan Humiston about Crowdfunding and how cannabis companies are using this method of raising capital to fund their growth.  Brett explains how companies can access their Crowdfunding platform with nearly 100,000 investors.

Produced By MJBulls Media

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Dan Humiston:
Today Show and the following message are brought to you by Trevett Hill cannabis investors expect big returns from the companies that they invest in. Unfortunately not all cannabis investments succeed. Trevett hills management team works with investors to help turnaround or in some cases purchased their underperforming portfolio companies to learn more go to Trevetthill.com.

Brett Andrews:
If you think about what the benefits to crowdfunding are one of the biggest in addition to the capital that you raised me over to our hundred thousand plus investor base to your product Dan I think that added layer that a lot of companies take advantage of is if you've got it already having engaged customer base is really passionate about what you do. A lot of times companies want to allow those folks to be able to participate in the upside because this.

Dan Humiston:
From Buminit media it's the MJ bulls podcast a show about Raising Cannabis Capital.

Dan Humiston:
Dan Humiston. And on today's show the investor spotlight is shining on crowdfunding and how more and more cannabis companies are using this method of raising capital to fund their growth.

Dan Humiston:
Today at the Cannabis investor Spotlight Series we are joined by Brett Andrews with micro ventures Brett. Welcome to hemp MJBulls Podcast.

Dan Humiston:
Thanks for having me. Dan happy to be here.

Dan Humiston:
I'm excited. I'd like a lot of our listeners are really really curious about crowdfunding I know micro Ventures is a broker dealer equity crowdfunding platform. So let's begin with crowdfunding because I think everyone kind of knows a little bit about crowdfunding but most people I don't know are still comfortable enough to use it. Can we start there just kind of give us the 1 to 1 on crowdfunding.

Brett Andrews:
Yeah of course. So yes first off just a little background on the company itself. So micro ventures has been in business for about 10 years now over that period we've raised roughly two hundred million dollars for around two hundred and fifty companies currently have an investor base of a little over one hundred thousand seventy five percent of those folks are non accredited. So they're sort of your mom and pop retail investors and then the other 25 percent are accredited investors. So we do as do we do three types of deals typically late stage secondary companies like Uber air BMD lists you know a lot of the tech names that you heard the unicorns will come up with early voice stock options that they want to liquidate prior to an IPO and and we'll negotiate a price and then offer that to our accredited investors only because it's a private offering. The other two types of deals that we do are private primary five or six raises so that the direct investments into companies so crowdsource but only through our private accredited networks and then public crowdfunding offerings which are available to our entire hundred thousand plus investor base.

Dan Humiston:
Okay. So if to say there's this startup. Walk us through the process how a company would go about using micro ventures to initiate a crowdfunding raise whether you connect with me or someone else here or you come to the website.

Brett Andrews:
The first step is typically a phone call learn a little bit more about the company. He usually go through a pitch deck and then we kind of step on our side and what type of deal would be the best set for. So we have weekly meetings where we talk about the deals that we've reviewed and we have a community meeting and decide which ones that we think are going to be set in which path is best. So that's usually the first part of the process.

Dan Humiston:
I see some of the deals that are on your website right now where they're raising somewhere between 50 thousand dollars and a million dollars.

Brett Andrews:
Walk us through how that works through the deals that you're seeing on our website or that our lives are working with a public crowdfunding offering. So clearly we're looking for something that's already producing revenue also they've got a product that's out in the market got sales to show that there's there's a need and there's a want by the market for the product. We also like consumer facing products for the public if you think about what the benefits to crowdfunding are. One of the biggest in addition to the capital that you raise is the closure to our hundred thousand plus investor base to your product and I think that added layer that a lot of companies take advantage of is if you've got it already have an engaged customer base is really passionate about what you do. A lot of times companies want to allow those folks to be able to participate in the upside of the business. So there are companies that come to us and say Not only do we want to raise funds we want to market to Investor Days. We'd like to have our customers be able to participate in this. So then they can sign up and invest as well.

Dan Humiston:
And I see some of them will say there's 38 days left in shows how much they've raised so far. How many investors are involved. I mean it's very comprehensive.

Yeah. We try to track the amount that's been raise the number of investors that involve you really are public raises go for about 60 days. That's usually the max that we put on it. Obviously if we hit the goal sooner than we can close it up sooner but that's typically the max deadline.

Dan Humiston:
Yeah and some of them I see it looks like they've exceeded their goal because some you know this one is four hundred and sixty two percent. This one's one hundred and fifteen percent of goal so there's opportunity to go beyond. How do you do the valuations. This is the big question that people care about is how do I know what the valuation of these are.

Dan Humiston:
You're talking about from an investment perspective if you click on any one of those active raises and open up into their campaign days are DDT actually put together the terms of the raise are negotiated between us and the company start out a little bit more of an art than a science at this early stage. But a lot of them. So we have a good feel for what the market will bear in terms of valuation. But if you're a investor and you click on one of those offerings you can scroll down all of them will show the term sheet.

Dan Humiston:
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Dan Humiston:
Let's switch gears. We've been talking about the companies that are raising money. Let's talk about the investors who part of your one hundred thousand investor group. How did they become an investor.

Brett Andrews:
So it's a pretty simple process. We go over to our website you can create an account. If you do mark that you're accredited we haven't it does relations team here and how their job in addition to fielding questions from investors about specific deals is to get out those folks and make sure they actually meet the government quietly of being accredited. If you do meet that mark then you will have access to not only the public raises that we have listed on our platform but the private deals which are behind you know I used the term paywall is not really God because you're not paying to see them but they are behind sort of a privacy wall. So if you if you're market accredited you have access to all the deals on our platform but if you're not a credit investor and you're looking to participate in the public offerings it's a really simple sign up process so you can go over there and just create an account and will walk you through pretty easily.

Dan Humiston:
Yeah. Yeah man this one companies that's raising capital minimum investment of one hundred and one dollar. So it's not like you need to have a lot of money.

Brett Andrews:
Yeah generally are on the public raises are minimal investment. I think in almost all cases are 100 hundred and so yeah you can get involved for as little as 100. It's not too much to participate in companies that you're passionate about.

Dan Humiston:
And then when it comes time to cash out. How does that work.

Brett Andrews:
Yeah. So Micro ventures works as the intermediary for all that the transfer agents so when there is an inaccurate event and we have you know our in-house team we'll deal with the disbursement of funds. We also do the dispersal of information. So you know one of the concerns from the company's standpoint is am I going to deal with you know having hundreds of people who own small portions of my company wanting to get information every other week where we handle that as they share information with us and then we disperse that out of the crowd of investors that we've sourced.

Dan Humiston:
Ok. Before we wrap this up let's talk about cannabis investments. Companies that are raising in the cannabis industry if they're raising money. Can they participate.

Brett Andrews:
We do. We're actually very interested in that base right now. As many investors are do want to clarify we don't actually invest in any companies that are touching the flowers so anyone who is manufacturing growing distributing or retailing unfortunately at the moment we're out. But right now we are actively looking at companies that are providing ancillary products and services to the candidates industry. Very bullish on and our investors have been wanting to get involved in those for a while we actually have some discretionary funds in addition to our crowdfunding platform that we look for specific verticals cannabis happens to be one of them. So yeah. Right now we've got a couple deals in the pipeline that we hope will wash fairly soon here which will be our sort of first foray into the industry and we're really excited about it.

Dan Humiston:
Well we're going to have all of micro ventures information on the MJBulls Web site. This is good stuff. And I am glad that you clarified some of the stuff with crowdfunding because I know a lot of companies would be perfect for this. I suspect if they want more information or we'll do a little deeper dive share you'll be happy to speak to them.

Brett Andrews:
Yeah I mean one of the things that I always say is the new form of funding is there's a lot of education that needed to be done both on the investor side and in the company side our CEO Bill Clark right. A lot of your post that you can find on our website if anyone does have any questions I'd be happy to answer them on the phone call or e-mail.

Dan Humiston:
Sounds good. Well Brad thanks for being on the show and I really appreciate you taking the time to explain this to us.

Brett Andrews:
Likewise I appreciate it. They're doing great.

Dan Humiston:
Yeah. Well good luck. Keep us posted. OK. Just a quick reminder that you can become an MJbulls member for just four dollars and ninety nine cents per month and enjoy exclusive access to companies pitch decks and the MJBulls cannabis capital directory. Joined today at MJBulls.com.

Thanks for listening to the MJBulls Podcast. To learn more about today's guest or to become a guest. Visit our website at MJBulls.com. Today's show was produced by Buminit media with original music composed by Jamie Humiston I'm Dan Humiston and you've been listening to MJBulls Podcast.

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