The CEO of cannabis-tech startup Headset told us why having a concise mission statement is crucial to successfully pitching investors
- The CEO of Headset, a data analytics provider for the cannabis industry, revealed his key advice for making a successful pitch to potential investors.
- Cy Scott walked through his pitch deck during a webinar moderated by Business Insider.
- Scott emphasized the importance of having a clear and concise mission statement, which "aligns everyone to the organization" and hooks investors.
- The company recently brought in $12 million from its Series A funding round.
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The CEO of Headset, a data analytics provider for the cannabis industry, revealed his key advice for making a successful pitch to potential investors.
Cy Scott, Headset's CEO said that a company must have a clear and concise mission statement. It's the foundation of the company and sets the purpose of the business.
That mission statement "aligns everyone to the organization," Scott said in a recent webinar moderated by Business Insider.
The "elevator pitch," or the ability to sell your company's main goal in one sentence, is key to hooking investors and establishing solid ground in the presentation. That's so everyone has a clear understanding of what the company's mission is at the outset of the pitch, Scott said.
Headset was initially hoping to raise $6 million in its Series A funding round, Scott previously told Business Insider. The startup ended up raising just over $12 million at a $43 million post-money valuation in January, as venture capital firms have increasingly targeted the cannabis-tech space.
VCs are betting on cannabis startups
As of July of this year, VCs have poured $1.6 billion into cannabis startups, up from $1.2 billion in all of 2018, according to a recent report from the data provider PitchBook.
Most VC funds still draw a hard line between cannabis tech companies, like Headset, and branded products that "touch the plant" or sell and distribute THC. That's because THC is illegal under US federal law.
Scott said that Headset's mission is simple: enable success for the cannabis industry by driving informed decisions through data. The company collects retail sales data and provides market intelligence to dispensaries across the country.
"With the mission statement, you're taking out the guesswork and you're able to articulate the whole mission," Scott said. "We reemphasize here that the solution is data and Headset is the solution."
Why Poseidon Asset Management was drawn to Headset
The clarity of the mission statement is what immediately caught the attention of Emily Paxhia, a founding partner of Poseidon Asset Management, a cannabis-specific investment fund, she said.
Poseidon led Headset's recent Series A fundraising round earlier this year.
"It demonstrates real discipline by a founder to have a clear mission statement," Paxhia said in the webinar.
She added that she's been in many pitch meetings where a startup has turned its mission statement into a 10-minute, overblown spiel. If that's the case, Paxhia said the company has more work to do. She said it's important to "distill the most important points that would really resonate with investors," before putting together the pitch deck.
For Scott, the mission statement also acts as the throughline for the company as it continues to grow. Since the Series A round, Headset's team has doubled in size, he said.
"The mission statement is fundamental means to align everybody to remember why we're here," Scott said. " We're here to make sure this cannabis industry is successful by making sure that the businesses in the industry are successful."
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