Today's featured Cannabis Investor is Marion Mariathasan The Cannabis Investor Series Sponsored by TWO12 is back for the Fourth year. This year, the Series will feature eighteen of the cannabis industry's top investors, reviewing the previous 12-months and sharing their 2022 investment strategies. On today's episode Dan Humiston is joined by Angel Investor Marion Mariathasan from Simplifya. Produced by PodConX TWO12 - https://www.two12.co/ Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Marion Mariathasan - https://podconx.com/guests/marion-mariathasan Simplifya - https://www.simplifya.com/
Today's featured Cannabis Investor is Marion Mariathasan
The Cannabis Investor Series Sponsored by TWO12 is back for the Fourth year. This year, the Series will feature eighteen of the cannabis industry's top investors, reviewing the previous 12-months and sharing their 2022 investment strategies. On today's episode Dan Humiston is joined by Angel Investor Marion Mariathasan from Simplifya.
TWO12 - https://www.two12.co/
Raising Cannabis Capital - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Marion Mariathasan - https://podconx.com/guests/marion-mariathasan
Simplifya - https://www.simplifya.com/
RC Marion Mariathasan
Dan Humiston: [00:00:00] And the MJ bulls podcast. We are continuing this year's cannabis investors series with Marian the CEO and co-founder of simplify a and welcome to the show.
Marion Mariathesan: Thank you then it's nice to be here.
Dan Humiston: I'm glad you could join us today. And now simplify is the leading provider of regulatory and operational compliance software for the cannabis industry. We're going to do a show exclusively about simplify in the future. But for today, we're going to be talking about investment because Marianne has a ton of experience on both sides of the investing, whether it's raising money or investing money.
And that's where I'd like to start. Last year, we saw valuations really go down, which prompted a lot of cannabis companies. To put their fundraising on hold is now a good time for companies to raise capital.
Marion Mariathesan: Yeah, I think I've seen things turn quite [00:01:00] a bit. Last year it's simplified. We actually did do a bridge round and we closed 2 million, but I think we were one of the few that were able to actually run. Primarily, because I think investors got spooked by COVID and what that was going to do to the market in general.
But this year, so far, I've seen quite a bit of activity. As we've marched towards some form of legalization there's a lot of excitement, brewing out, not just in the angel world, but in the venture world. And so it's no better time right now than what's WhatsApp.
Dan Humiston: Yeah, I think you're right. It's like last year was scary. There's no doubt about it but I think, now people are starting to feel more comfortable and I see a lot more activity. Let's talk about your cannabis investing. Do you have a fund or what type of stages do you like to invest in? Or what type of sectors do you like to invest in?
Marion Mariathesan: Yeah.
So for me I'm a little bit more go where the wind blows me and what looks exciting. Currently I've got 22 investments [00:02:00] 20th, which are in the canvas space . , I'm not a very sophisticated investor.
So I go much more with my gut. I do have a business partner that does more of the diligence, but for me, I'm looking for solid team or solid founder, obviously the concept, what's the problem that they're trying to solve. And then really do they have the drive and the passion to get it? As an entrepreneur, when I started out, gosh, 18 some years ago I had no clue what I was doing, but I had the drive to solve problems.
Right. And in different areas. , so I consider myself an angel investor, typical checks anywhere. Hundred to two 50 maybe. And it also helps if there's a venture group, that's also looking at them. Are there other investors? There's a whole host of things that I think, people look for, but those are a few that I, focus on.
Dan Humiston: You mentioned the angel investor, and maybe you can explain how the relationship between an angel investor and the companies different than a relationship [00:03:00] between a company and a VC firm.
Marion Mariathesan: Sure. Absolutely. One thing I wanted to add, you asked early about what stage of companies, Dan, and just to be very clear. So I typically go in. So it'd be a nice segue into your question right now. If you're early stage company as a startup founders round seed stage, that's usually where I like to play in, because I don't like to just write the check.
I like to also be able to add value. Right. And I think a lot of VCs and angels try and say that. And even for me, if I can't add value and I really liked the company, I'll say that being the case. But typically if it's a tech related company I'd like to make introductions, I'd like to help them think through the process division, what the roadmap looks like.
Typically a VC comes in when you're a little bit more mature. You've got some traction Murda capital is a great example. They were one of our early events. And they're a little different thing than the traditional ones, but just like SilverLeaf capital, which is another investor of ours.
[00:04:00] They when they come in, they're looking at again, what's your run rate, where are you headed? What kind of team do you have? But the difference between an angel and a VC is that an angel is coming in earlier on. So they have much more. Right. And so they're going to try and handhold, you trying to guide you much more than a VC would not to say that VCs don't because they also, even Meredith SilverLeaf they certainly want to be helpful, because typically they have much more of a diverse portfolio.
Will they have the opportunity to spend that time? Mostly likely not, but you know, it just depends.
Dan Humiston: I think with the angels, a lot of them seem like they were. Successful entrepreneurs and then gravitated towards the investing side, after having a successful entrepreneurial career, or in your case while you're having a successful. So you bring that entrepreneurial gene or DNA , to the equation.
I think that's important , for the, like you said, the introductions and those are critical.
Marion Mariathesan: Absolutely. I, I've been very [00:05:00] blessed, fortunate, what are you going to call it? And that, I've had some exits myself in the past, but I think, angel investors see themselves in entrepreneurs, right? Because when you first start out, you're going through the ringer yourself.
And so when I meet really passionate entrepreneurs that are trying to solve problems, I see myself in it. And if they've got what I feel like for me personally, the drive and the passion and the knowledge to get it done, then I certainly like to jump on those ships.
Dan Humiston: To me that seems like the most exciting one. So let's just talk to that type of company right now. And if they were a company who was considering raising money, say like when six months, what type of things should they be doing now so that they get on your radar?
Marion Mariathesan: Yeah.
So, as you can imagine that, unfortunately there's a lot of companies and people trying to raise money and not as many maybe investors. So one of the things that I personally like is if someone really wants to meet with me for an investment to get an introduction to me [00:06:00] from someone else I know.
That's really important because, again,, I get hit up often, the spine probably five to 10 times a week.
And, if that's the easiest way to read through the unintended, right? The crowd. And then outside of that just really have, your financial projections your deck.
I don't need to see extremely detailed plans. , a business plan or a business deck is really just a roadmap. Where do you see the company going? Right? And so even if it's high level oftentimes I joke that investors are a little bit add. So if you give them too much details, they're going to get lost in it.
So high level 10 to 20 pages or slides clean, financial projection. And then you need to be able to really back that up as to how you got to those. And That's that's really what I look for. And then as I mentioned earlier on the issue. That I like to see at least two founders, a founder and a co-founder because I think this is just my personal experience.
When you have a one man team it's really hard to, think through all the [00:07:00] different nuances in areas and keep yourself motivated. So I really look for at least a two person team that's starting up.
Dan Humiston: That's interesting. That's interesting. I know a lot of early stage companies. Their first funding round will usually be in the form of a convertible note. And if they've never done one before, there's a little bit of confusion behind that. Have you done some, and maybe you could explain how they work.
Marion Mariathesan: Yeah. So convertible notes from my perspective it's I think. Some would argue there's benefits and drawbacks on both sides. But I think the benefits really for the company is that you can get it done quickly, right. Versus an equity round where valuation and all sorts of different components come into play including the subscription docs.
And there's just a lot of documentation that has to be done. But with the convertible note, it's much easier because one, the company can, say Hey, we're raising. You call it 1 million at a $6 million valuation cap, right? We're willing to [00:08:00] give you a, 5% discount and there's a coupon.
And what does all that mean? It's basically like a debt, right? So if you put it in a half, a million dollars, you're getting a half, a million dollars in a note that matures in a certain day, it has a discount to it.
And when it converts there's. And what that means is down the road, when an equity round is actually done my debt converts into equity, but there's some preferential treatment for me because I came in early on and that's the easiest way to explain it. And which is why I, I think it is becoming more and more of a popular tool, but I think it's a great tool for startups.
Dan Humiston: I think it's a great tool too. And it's also, like you said, it makes things a lot less complicated and help, We have so much more to talk about Marion, but as I mentioned, we're going to have you back on to do a whole show about simplify, but if anybody wants to reach out to me Korean, or have one of their friends reached out on their behalf to Marian and do that.
Warming. Cheryl we'll have his contact [00:09:00] information in the show notes. And so you can just click the link or go to pod connects.com to learn more. Possibly working with Marian and definitely to learn more about simplify Marianne. This was fun. I'm looking forward to the next time.