Raising capital for your business is never easy, especially if you’re a woman. At the turn of the 20th century, the very idea of a female entrepreneur was virtually unheard of. The only women who actually did own their own business were either women in dire financial straits or widowers taking over their husband’s business.
But all that changed thanks largely to the advent of the feminist movement, early entrepreneurs like Coco Chanel and circumstances like World War II, which necessitated greater female participation in the workplace. And yet, nearly a century after women gained the right to vote, things haven’t changed as much as they should have.
According to Forbes, fewer than 6% of decision-makers at venture capital firms in the United States are women. In 2016, while male entrepreneurs received more than $58 billion in funding, female entrepreneurs received $1.46 billion, approximately 2.5% of what men received.
However, while the business world continues to stall on gender equality, the cannabis industry is blazing forward toward the future. According to a survey conducted by Marijuana Business Daily, approximately 27% of executive level roles in the cannabis industry in 2017 were held by women. The national average is 23%.
If you only count ancillary cannabis businesses, that number rises dramatically. Women hold approximately 42% of executive-level positions in ancillary cannabis businesses. Although not quite as impressive, approximately 35% of executive-level positions in cannabis dispensaries are also held by women.
But even in industries as progressive as cannabis, women can still run into gender-based barriers. Green Market Report founder and CEO Debra Borchardt recalls an incident in which she was advised to hire a man specifically for the purpose of raising capital.
“I was told that trying to raise money for a female-led company is extremely difficult. However, if I had a man who was focused only on raising the money, he could tell our story better and be more effective,” she says. “This advice came from another woman with an investment bank background, who said she hated even saying this, but that it was the reality that women faced when trying to raise money for their companies.”
When startups try to raise capital, most will try to go through traditional avenues, such as angel investors or venture capital firms. A smaller fraction of startups will also seek capital with business incubators, which typically provide advice and assistance in raising capital in exchange for equity or a fee; think HBO’s “Silicon Valley,” but far more professional and functional.
While those may be the most popular avenues of raising capital, the Internet has given rise to alternative forms of funding, like crowdfunding. Crowdfunding is fundraising facilitated by the online masses, and according to Stemless CEO Koushi Sunder, it’s one of the best ways for a woman in the cannabis industry to raise capital.
Stemless is a Portland-based cannabis company that connects users to their favorite retailers, allowing them to easily order cannabis online in just a few short steps. Currently, Stemless is in the middle of a fundraising round and so far has raised $525,000 of its $750,000 goal.
“From what I can see, crowdfunding is the most unbiased way to raise funds,” Sunder says. “It’s not that it’s a perfect system but there are a greater proportion of women-led companies successfully raising in the crowdfunding sphere than in the institutional one.”
One of the most popular crowdfunding websites is Kickstarter, although there are also crowdfunding sources specifically geared to the cannabis industry. Usually, startups running a crowdfunding campaign will offer incentives or products based on the amount of money donated to the campaign, and some businesses have been known to offer equity in exchange for sizable donations.
Sometimes, however, even the best crowdfunding campaign in the world cannot overcome gender-based inequality, which is why some women have created investment resources that are specifically geared toward women, such as Golden Seeds or Pipeline Angels.
Here are a few websites that have assembled comprehensive lists of female-oriented investment resources: 37 Angels, Crunchbase and Startup Funding.
But while there are a multitude of capital-raising resources for women, many are still ill-equipped to deal with the cannabis industry, due in large part to cannabis’ federal status. Luckily, there are plenty of avenues of investment created specifically for the cannabis industry. Here’s just a few:
– Venture capital firms: Regardless of the industry, the most popular way to raise capital is through a venture capital firm, and unsurprisingly there are quite a number of cannabis venture capital firms, through which companies are given capital in exchange for equity in the company. Two of the most successful capital venture firms are Casa Verde, of which rapper Snoop Dogg is a partner, and Canopy Boulder. Although not quite as famous, there are also several cannabis VC firms run by women, such as Hypur Ventures, which has Yale School of Management graduate Tahira Rehmatullah as its managing director.
– Pitch forums: Cannabis pitch forums are also a great way for women in the cannabis industry to raise capital. Formats for cannabis pitch forums typically differ depending on who is hosting the event. The popular format is probably the “Shark Tank” style pitch forum, where potential entrepreneurs pitch their idea to a panel of big-name investors. The Seed Series, CNVest and a countless number of other events that pop up every year in the U.S.
– Cannabis business incubators: Another great way for women to raise capital in the cannabis industry is to go through a business incubator. While there are a lot of business incubators out there, finding one that’s geared specifically for the cannabis industry might be your best bet to find funding. Two of the most successful cannabis business incubators around are Canopy Boulder and Canopy San Diego. In exchange for some equity, they offer a 16-week boot camp with a focus on mentoring. Greenhouse Ventures offers a similar 10-week boot camp. Some of the lesser known incubators are also great for raising capital, like The Blinc Group, Gateway Incubator and Marijuana Accelerator.
– Investor conferences: One of the best ways for women to increase their odds of gaining funding for their business is to circulate cannabis investor conferences. These events happen year-round across the nation. Usually these events are magnets for high net worth individuals ready to invest in the cannabis industry, so it’s only a matter of finding the right investor for you. Some investor conferences that might be worth checking out are the Cannabis Business Summit, the California Cannabis Business Conference and the Institutional Capital & Cannabis Conference (IC3).
– Cannabis crowdfunding: Although crowdfunding is one of the newer ways to raise capital, it is definitely something that should not be overlooked. Perfect for the cannabis industry, there are quite a few crowdfunding resources from which cannabis companies can choose, depending on what each entrepreneur is willing to give away. If you’re willing to give away a little equity in exchange for funding, you should check out the crowdfunding platform Fundanna. The benefits are that it’s easy to register, there’s little risk to you if your business does not work out and connecting with investors is actually pretty easy.
One drawback is that you have to pay some expensive fees in order to use the site. If you’d like to avoid the high fees, check out Cannafundr, which is a little different in the sense that it’s more investor-centric, meaning it is easier for investors to connect with you than the other way around.
Aside from these fundraising avenues, the best weapon in a woman’s arsenal for raising capital is to have the right mindset. Erin Gore, founder and CEO of the women-oriented cannabis brand Garden Society, recommends that women do everything in their power to set themselves up for success before seeking investors.
“Make sure you have a strong product or service, make sure you’re succinct and different, make sure you understand your finances and your financials are clean, and then make sure you’re clear about what you’re trying to raise money for,” Gore says. “If you can master those, you will be much more successful with your fundraising goals.”
Cynthia Salarizadh is a managing partner of KCSA Strategic Communications, founder of AxisWire and co-founder of Industry Power Women. Salarizadeh is a published author on cannabis business and trends, as well as the publisher of the Cannabis Trend Report and the Cannabis Brand Report. She has a degree in international relations from the University of Pennsylvania and a certificate in journalism from Georgetown University.