Crowdfunding has become a popular way for aspiring entrepreneurs to get their ideas off the ground. While traditional business loans or securing money from investors have traditionally been common ways businesses acquired capital in the past, crowdfunding offers a way to keep more ownership stake and to keep your vision intact.
This relatively new way to raise business capital may be an ideal option for small businesses in the cannabis industry. Since most cannabis businesses do not have access to bank loans, their options for funding can be limited. While many of the mainstream crowdfunding platforms out there will not take money for cannabis startups, we found three that have been created specifically for the industry.
Fundanna is a cannabis industry-specific crowdfunding network that connects small business owners with investors around the world. Fundanna was formed in 2016 offers several services including helping clients connect with advertisers that can help spread brand awareness. If your company is ultimately not successful, you will not have to pay back the money raised but you will still be charged a listing fee of $3,500. There is also a fee assessed if your fundraising goals are met. Fundanna donors do not simply give away money. You’ll be exchanging equity in your company for business capital, so make sure to raise only what you need. There is a $1 million maximum to what you can raise and floor of $10,000.
CannaFundr has been around since 2014, so it is the most established cannabis crowdfunding platform around. CannaFundr also exchanges equity for capital raised. However, there are no fees to sign up for the service. You can upload videos, pictures, and presentations through CannaFundr, giving you the ability to really sell your vision to investors. Unfortunately, you cannot view other campaigns or interact with investors to get their advice/feedback about your plan.
420fundme does things a bit differently than Cannafundr and Fundanna. You will not be giving away equity in your company in exchange for investment. You’ll be rewarding investors with special treatment, such as early releases of your product, or other gifts to show your appreciation. It’s important to come up with valuable and attractive gift options. This can cause some headaches as it can be hard to figure out equitable ways to pay back investors without breaking the bank. 420fundme also offers marketing and advertising services, as well as dab parties and dinners to put potential investors in a giving mood.