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Documentation, Business Planning, Raising Captial and Team Creation

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By Barton Morris - September 22, 2017

Published in: Business
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Documentation, Business Planning, Raising Captial and Team Creation

  1. 1. Documentation, Business Planning, Raising Capital & Team Creation September 22, 2017 Cobo Hall Detroit, MI
  2. 2. Organizational Documents

  3. 3. What do I need to send to the State? Articles of Organization (Form through the state) Procedure: ◦ Submit proper form to state and wait for return documents. ◦ Receive your assigned ID number ◦ Use ID Number for any additional filings (i.e. to get an FEIN)
  4. 4. What is included in my Articles of Organization? • Name of Corporation (Use LARA Entity Search) • Name a Resident Agent • Resident Agent is the individual that will accept service of a lawsuit if you were ever to be sued. • Name of Organizers • Number of Shares (Corporations Only) • Can include other items like dissolution agreements or distribution of assets.
  5. 5. Operating Agreements
 
What is an Operating Agreement? ◦ Clearly lays out the way a business will be structured and operated. ◦ Governing document for business disputes. What should it include? ◦ Choice of Law Provision ◦ Choice of Forum Provision ◦ Arbitration clause ◦ Triggers- What if someone commits a crime? What if they leave the business? ◦ Buy out provisions
  6. 6. Investors- Raising Capital Investors
 • Get Funding for Equity- trade off • Begins with Angel Investors • Venture Capital Infusion by Venture Capital Firm as business grows • Both Angel investor and venture capital groups forming for cannabis industry • Private Equity- as businesses mature • Give Up Control of Business
  7. 7. • Identifying the amount of money your project needs • Identifying what you are willing to give up for that money • Money plus • Loans vs. Equity • Proof of Funds
  8. 8. Pitching Investors Pitch Deck • Gives a glimpse of business • No need for NDA at this point • Take with you • Prefer face to face with small group • Print out vs PowerPoint- Do not email • Set agenda day before with investors • Overview of financials • Executive Summary • Business plan without the nuts and bolts
  9. 9. NDA/ENRA Pitch went well…. • Sign Non-Disclosure or Exclusive Negotiating Rights Agreement • Both allow for confidential information to be exchanged • ENRA is NDA on steroids, basically getting engaged and working towards a formal agreement. • ENRA allows for negotiations just between the parties, while a general NDA may allow outside negotiations
  10. 10. Convertible Loans/Interest • Investors loan company money • Get paid back a certain percentage • Reserve the right to convert some of the debt to equity • This can be important especially if out of state investors though no out of state restrictions for Michigan • Used to get better terms for the loan ie lower interest rate
  11. 11. Equipment and Real Estate Financing • Loans/Mortgages • Hard to get with new business • Might have to personally guarantee • Could do option of Land Contract • Finance equipment through equipment dealers
  12. 12. Thank you! (248) 541-2600 cannabislegalgroup.com

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