Nasdaq-Traded Co. CFO Tahira Rehmatullah Shares Advice for Cannabis Startups
Should entrepreneurs fundraise, bootstrap or go the crowdfunding route?
“Wonder Women Of Weed” is a show and column I co-host with Adelia Carillo, CEO of Direct Cannabis Network. In it, we feature accomplished female leaders in the cannabis industry. Our latest guest was Tahira Rehmatullah, often regarded as one of the most powerful women in the cannabis industry, with Fortune Magazine, Complex and Benzinga among those that have gone on record about it.
Tahira, holder of a Yale MBA, serves as CFO of Nasdaq-traded MTech Acquisition Corp (NASDAQ: MTEC) and Managing Director of cannabis-focused venture capital fund Hypur Ventures. Prior to this, Tahira worked at Privateer Holdings and acted as the General Manager of famed marijuana brand Marley Natural.
Over the course of the show, we went into numerous topics like how to deal with the marijuana industry’s constant and rapid change and being a woman entrepreneur. One of the most interesting topics was that of capital needs. Should entrepreneurs fundraise, bootstrap or go the crowdfunding route?
“Every entrepreneur and company is different in regards to where they are starting from and how much they need in order to get into the market,” Rehmatullah says. “For instance, the minimum viable product [MVP] for an edibles company is very different than a software platform or a cultivator.”
“When I’m talking to an entrepreneur, I start by asking them to spend very real time assessing what their needs are to get to that first product or that prototype or that MVP. And when they get there, do they think it will still be relevant? That includes talking to other entrepreneurs and businesses that are in a similar vertical to really understand how long it took them, how much capital it took them, etc. Not everybody will be transparent about that information but you would be surprised at how many people are willing to share what they have gone through in order to help others along the way.”
Bootstrap as much as possible
As far as the type of funding goes, she adds, there is no right answer. However, Rehmatullah encourages companies to bootstrap as much as possible until they get to a minimum viable product to show investors and customers in order to to convince them about the value of your product. You need to be more than “just a PowerPoint deck,” she says.
One final piece of advice: be really aware of the space you want to operate in and how competitive it is. “You have to prove the gap that you’re trying to fill and the need for your product,” she concludes. “Don’t try and raise money before you have those answers. Once you do, I think it comes down to how well you understand your costs and your timeline to market. Those will impact the type of funding you need and at what point in that timeline.”