What is Receptive Capital?

An investment firm focused on the legal cannabis industry through principal investments, syndicated investments and advisory services.

What is the Receptive Capital Syndicate?

The Receptive Capital Syndicate (the “Syndicate”) is a group of early stage investors who seek access to highly-vetted, private deals in the legal cannabis industry. Currently, the Syndicate is focused on investing in brands, technology and groundbreaking science companies in the East Coast cannabis markets of the United States. The Syndicate is led by Rick Bashkoff, Managing Director of Receptive Capital.

How does it work?

When you become a member of the Syndicate, you're under no obligation to invest in any deals. You are only showing interest in receiving information about the deals and committing to keeping any information you receive confidential.

The Syndicate Lead invites members to participate in or pass on any given deal. The Syndicate members pool capital into a special purpose vehicle (“SPV”) that invests in a single company alongside the Syndicate Lead, on a deal by deal basis.

You can read more about the step by step process and our fund administrator.

What is a Special Purpose Vehicle (SPV)?

Angelist defines an SPV as:

“… Special Purpose Vehicles (SPVs) are legal entities that are created for one specific purpose. In venture, SPVs are used to pool money from a group of investors to make a single investment in a startup.” If you’d like to read more about SPVs please read more here.

Who is the Syndicate Lead?

Rick Bashkoff, Managing Director of Receptive Capital. I've held senior positions at one of the largest record companies in the world, a pioneering media tech startup, an enterprise SaaS company in growth mode and an early stage cannabis technology company. I specialized in building long-term, mutually beneficial partnerships and I’m highly skilled in the creation and execution of a wide variety of business models and business plans. Throughout my career I have been an active investor through personal investments mainly focused on tech, CPG, cannabis and crypto.

You can read more about me and why I launched the syndicate.

What are the requirements to join the Syndicate and invest in deals?

There are two requirements:

1. You must be invited to join the Syndicate. 

2. You must be an accredited investor as defined by the SEC here.

An accredited investor, in the context of a natural person, includes anyone who:

• earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR

• has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). 

What does becoming a member entail?

The onboarding process includes (1) completing a simple form about yourself and (2) signing an NDA (One NDA for all deals moving forward. You will not have to sign an NDA for each deal) . Beyond that, I ask that you review the deals I send and keep the details confidential. That is all.

Am I required to invest in the deals?

No. Being a member of the Syndicate only means you are interested in receiving information about the deals and committing to keeping any information you receive confidential.

How do I join the Syndicate?

Membership in the Syndicate is currently invite only. If you are ready to join the syndicate please complete the onboarding form and NDA. You will receive an email confirming you have been added as a member of the Syndicate.

How are the deals sourced?

As an investor, consultant and advocate in the cannabis space, I have connected and worked with hundreds of impressive founders, experts, executives, service providers and investment professionals in the cannabis industry. This personal cannabis-focused network, as well as non-cannabis executives and investors who frequently send me cannabis deals for my opinion, has created an existing deal flow that frequently exceeds 15 deals per month.

What evaluation process is followed in order to vet investment opportunities?

The following in the investment evaluation process that I follow:

1. Source - An opportunity is sourced via one of the channels detailed above.

2. Evaluate - Initial meeting with founders and an initial high level assessment of investment opportunity and materials.

3. Due Diligence - Activities are wide-ranging and will include: Follow on deep dive meetings with key team members, running references on founders or key team members, product testing, market and competitive research, legal and financial due diligence (e.g. validating corporate documents, financial model review, etc.)

4. Investment Memo - Syndicate Lead will circulate an investment memo summarizing the opportunity and giving investors in the Fund the ability to engage, ask questions, or raise objections.

5. Close - Coordination of document signature and investment closing.

6. Participate - Syndicate Lead to provide ongoing business development and operational support to portfolio companies. 

How will the Syndicate promote diversity, equity and inclusion?

We believe that all businesses and organizations focused on the legal cannabis industry must promote diversity, equity and inclusion. No cannabis business or organization is complete without it. 

Here is our plan:

1. Our core mission, “To invest in, support and scale companies that enable a robust, sustainable and just cannabis industry” is anchored in an investment strategy that seeks founders and management teams with diverse backgrounds and companies that plan to act to right the wrongs of the war on drugs. 

2. We will donate funds on an ongoing basis to support the non-profit organizations fighting to help end racial discrimination.

3. We will provide opportunities for our members to discover and participate with organizations who fight for diversity, equity and inclusion in the cannabis industry.

We encourage you to learn about these great organizations:

Last Prisoner Project

Marijuana Policy Project 

Minority Cannabis Business Association

You’re a first time Syndicate Lead, how will you make this successful?

1. I will call on my industry knowledge from the past 5 years investing and consulting in the cannabis industry.

2. I will establish co-investment partners to leverage their collective knowledge base.

3. I have secured top flight legal and SPV administration partners.

4. I will leverage my operations experience and cannabis consulting experience to provide a critical perspective in conducting due diligence.

5. I have a thesis, an investment strategy, a process and ability to stick to it.

Why will entrepreneurs want the Syndicate’s investment?

After meeting with well over 100 cannabis entrepreneurs over the past 5 years, here are a few of my characteristics that I believe will stand out.

1. Value-add. My objective is to be the best value-add investor on the East Coast. I plan to do so by providing (1) valuable, qualified connections in and out of the cannabis industry, (2) recommendations for service providers and  (3) business strategy and management advisory services.

2. Character. I’ll be known as respectful, responsive, self-aware, easily accessible and an active participant in the businesses of our portfolio companies.

3. Operator Minded. I will leverage my operations experience and cannabis consulting experience to provide a critical perspective in helping our companies operate with sustainable growth.

4. Geographic Focus. The Syndicate’s investment activity will coincide with the launch and first 2-3 years of adult-use markets in the largest markets on the East Coast. The US cannabis business is currently 50 different markets. I believe narrowing in on this unique set of markets on the East Coast, will allow for greater focus, smarter investments and ultimately higher returns on invested capital.

5. Purposeful. Committed to creating a robust, sustainable, diverse and just cannabis industry.

When you say “focused on the East Coast” what states are you including?

For the purposes of this Syndicate I am defining the “East Coast” as the following states in alphabetical order. I plan to invest mainly in the Tier I markets listed below.

Tier 1: Connecticut (CT), Florida (FL), Georgia (GA), Maryland (MD), Massachusetts (MA), New Jersey (NJ), New York (NY), Pennsylvania (PA) and Virginia. 

Tier 2: Delaware (DE), Maine (ME), New Hampshire (NH), North Carolina (NC), Rhode Island (RI), South Carolina (SC), Vermont (VT), Washington D.C. (DC)

Why not focus on other regions?

I believe the opportunity on the East Coast is most interesting because of the following factors:

1. Densely Populated. 5/10 of the most populous states and 10/10 of the most densely populated states.

2. Large Metros. Large metropolitan areas including New York City, Boston, Philadelphia, Washington DC, which serve as entrepreneurial hotbeds and prime markets for national brands to emerge.

3. Interstate Travel. Large numbers of commuters and travelers cross state boundaries on a daily basis.

4. Timing. The new states set to legalize will have the benefit of learning from their trailblazing predecessors in the Western states. 

5. Cooperation. These states have shown a propensity to work together and could be one of the first regions to achieve significant interstate commerce.

   
   It’s also important to point out that the Syndicate’s investments can be founded in or have meaningful operations or expansion plans on the East Coast. For example, investing in a California founded company that is raising a round of financing to expand to the East Coast is a very interesting investment for the Syndicate.