Home / 1906 Pitch Deck to Raise $18m Series-A

1906 Series-A

Pitch Deck Collection

This is the 1906 pitch deck to raise their $18m series-a round in 2019 led by Navy Capital. 1906 sells Cannabis edibles.

About

1906 was founded in 2015 by Peter Barsoom in Denver.

1906, one of the most innovative brands in cannabis edibles, creates groundbreaking functional formulations of cannabis and plant medicines. 1906’s lineup delivers six unique experiences that promote sleep, energy, arousal, relaxation, cognitive focus and a happy mood, all in consistently fast-acting formulations using single-strain organic cannabis. 1906 supports medicinal cannabis research and invests a percentage of its revenue in clinical trials and educating healthcare practitioners. The company also invests in corporate social responsibility, specifically targeting employment opportunities for those formerly incarcerated individuals who have paid the heaviest price for a century of cannabis prohibition.

Funding Rounds

Data on their raises is a bit iffy. They raised a convertible note from Explorer Equity Group in 2016 for $2.7 million.

They then raised a series-A of $18m from Navy Capital ( a cannabis-focused fund in New York City) and others (a variety of high-net-worth people and repeat investors) in late 2019 to expand to the East Coast. CrunchBase can be super misleading. Apparently, the valuation was between $40 million and $50 million. I don’t know if that is pre or post- I would guess pre as that would put them at the low end of 25% dilution. This makes sense as raising money in the cannabis industry is hard. Peter Barsoom, the CEO said it was the case.

Barsoom, who came to cannabis after working in senior roles across Morgan Stanley, Merrill Lynch, and Blue Mountain Capital, said it took seven months to close the funding round.

He t0ld Business Insider “We did see headwinds like anybody in the cannabis space,” Barsoom told Business Insider over the phone. “The fallout from the IPO bubble happened fast and furious.”

Once plentiful, at least at the early stages, growth capital has slowly dried up for cannabis companies as public companies in the sector have seen their share prices crater. That has made venture investors wary of startups in the space, Barsoom said.

“I think that many companies went out to the public markets thinking that capital was infinite and time horizons were infinite,” Barsoom said. “So I think what we’re seeing today is likely to be the Pets.com and the Webvans of the cannabis space.”

For that reason, Barsoom said he was focused on keeping 1906 private — for now.

He used the funds to expand 1906’s low-dose THC and CBD-infused chocolates to new state markets, including Michigan, Illinois, and Massachusetts — states where he says the company can generate the highest return on invested capital.

“California is a crowded market,” Barsoom said. “I’m from the East Coast. We think our brand has a strong resonance with East Coast consumers and has an East Coast sensibility.” To that end, 1906 released a line of “Drops,” or pressed tablets that contain low doses of THC and CBD, as an alternative to the company’s infused chocolates.

And despite the expansion plans, Barsoom believes in running a “lean team.”

“We’ve seen — literally in the last week or two — hundreds of layoffs in the industry, where companies have unfortunately overextended themselves with hiring and that has resulted in a pretty significant pullback,” Barsoom said. “We’re focused on disciplined growth, adding people where critical and staying lean, and kind of, finally, not overextending ourselves.”

I obviously haven’t talked to him, but I get good vibes. He’s got a lot to deal with and he’s playing the long, smart game.

Pitch Deck Review Summary

It’s a beautiful deck. A lot of work was put into it. This is evident given the founder struggled to raise in the environment.

Retail brands are always hard. I mean ecom/retail is so decades ago. Sure, Dollar Shave, etc made out like bandits, but I’m not the best person to take a bet on these things. I’d love a retail VC to explain how they critically think about investing in deals like this.

It’s a fairly long deck, most notable for having an appendix. Don’t have an appendix. Your deck is to get a meeting. You can share more when they are interested. An appendix is code for:

I didn’t know where to put it
It’s not all that valuable at the moment but I’m so worried, I want to say everything just in case

Either way, it’s not a good look because the content just is not requisite now.

I would have to actually read their deck critically to give it a hard time. I feel there is a lot of quality fluff, and I’d like some more brutal specifics. But this is what you need to learn. You get like 2 minutes for someone to make a call. It’s all very well having content, but if it’s too hard to get it, you just feel eh. I don’t really want to read this.

Slide by Slide Review

Words

The amount of words per slide varies between mini-essays and just right.

Never write paragraphs. It’s painful. No one wants to read. It’s some indulgent bullshite.

Slide length

There are page numbers, but I wonder if they messed up or removed a slide somewhere.

There are 32 slides which is on the high end of things. There are more than a few pointless slides in the deck though. He seems to get a little confused between some pretty sales deck and an investor deck. Just because you are a brand doesn’t mean you have to put pretty photos everywhere.

Headers

They just declare what the slide is. They don’t have headers that flow in a narrative. They just have cliff notes which are the basis for a speech, they just forget they were meant to present those points.

They do a better job than some startups with their headers, but not many.

It pisses me off when people use superlatives.

“PHENOMENAL growth”.

“A MASSIVELY differentiated offering”.

I fecking bet you that they’re not. You use quality ingredients, well sure Tommy, let’s go second base behind the bike shed now. No one else has quality ingredients. Wait what? Do you have a ratio between CBD and THC? Seriously? Screw it, just jump to third base, I’m all yours hunny pie.

The only way I’m going to possibly believe any of this is if there is evidence of independent third-party testing.

Appearance

It’s an attractive deck. But they’re making way too much of an effort. I know the founder had a hard time raising but it’s too much effort.

I hate stock images everywhere. If it doesn’t sell why is it there? Oh wow, there’s a girl with an E in her mouth and she sure is happy it’s the weekend! I would prefer data and get to the point. Save the branding bs for marketing to customers.

Seriously, I just get creepy Burning Man vibes where everyone is now a walking pharmacy with a great tailor.

Narrative

The slides are in broadly the right order. There isn’t really an explicit narrative where you get drawn in. This is what I’d say is a solid deck, but it wasn’t consciously written with a narrative in mind and the content built on top of it. It’s really hard to write a great narrative for a deck (without expert help) so this is an A- for a normal kind of deck that goes around. It could of course be better though. I can tell effort has been put into loosely reading some of the slides.

Structure

Things are aligned well. There is negative space. It’s done by a designer who likes pretty things. I’m sure it cost a lot. I hate designers though. They love small text. They miss the point of the deck which is to get money, not be a pretty princess.

Slides

They generally cover everything. I mean it’s obvious a lot of work was put into it. It’s just a bit hard to get through with all the design BS. I like uglier decks that are easier to read. Personally anyway.

1906 Pitch Deck

Slide by Slide Review

The cover is basically best practice.

Pointless slide.

Mini slide essay. There is no data.

Big claim with no data. But there’s a chick sucking on a Malteaser.

What’s the problem? You haven’t said? Why do people need edibles? No data proof has been provided.

Hide pills in your pocket? A shade for every pastel!

Calling out stoners is smart though.

I don’t understand why I need to get high for self-care. There are a lot of assumptions here.

You can hire a firm to give you whatever results you want. Congrats.

What exactly does this tell me? Non-boomer women want to get high, and half don’t want to roll up a phat spliffy.

Another slide essay, score.

Becoming mainstream should be illustrated with a column chart over x years. Let me decide that for myself.

There’s a lot of conclusions being drawn from random ass stats. The fact women are anxious all the time doesn’t mean they want to shift from popping Vicadin in their Chelsea tractor to popping pot pills. There’s no longitudinal proof that anything is becoming something.

The text is too small to read. This is the designer being a designer. See, I would have a 3 by 3 so the text is legible.

Um, couldn’t anyone else do this too? That’s not defensible. It’s a short-term feature. They didn’t exactly say they have their own farms in all these places, as far as I’m concerned they might as well be buying them from the local Whole Foods.

In principle, it’s not a terrible slide (other than the bullet point essay which is white on pink).

This is a competitive differentiation slide. Rather than getting into details, let me just pose a question.

“If you showed this to your competitors, would they agree?”

I love this question and when founders hear it they always laugh because they know what I mean.

You are picking random variables where you are always awesome and everyone else sucks.

Another pointless pretty slide. I’m more interested in your product sales mix, competition for shelf space etc.

What’s the point of this slide?

“Partake” irks me. IDK, I don’t like drugs in general, I know I’m a prude. Honestly, I never used to have to drink to be bonkers. After my first year in Uni that changed, so I was like, I do not want to need drugs to have fun, so I’m not going there. I don’t take painkillers if I don’t need to out of principle.

Cool! Data and charts time. I love traction charts. It cuts through all the bull shite. The slide is decent, but I’d like it if there were some smart comments to tell me what it says. Always draw conclusions rather than make others draw theirs. Investors will anyway. Comments can be short, but I like them if they are insightful.

I hate the design. The contrast is small and the text is small. Again this is designer BS.

There is the potential for this to be good, but again, mini-essay. Just say what you want to say. Let me see how the expansion works.

OMG, I hate superlatives. Let me decide if there is differentiation. Read the 5 points. Tell me if I have you $18m if you can’t do the same.

OK, the images aren’t totally useless for once. I prefer the one on the rights as I can see the edibles being made. I’d prefer if there were say four images showing how the cookie is made. Then a header and description below to explain.

He already explained previously about expansion, so the manufacturing could have been on that slide.

Ergh again, “unprecedented”. It’s so annoying.

Essay again. The images could be a lot smaller and on the bottom of the slide. Anyone can hire PR firms to pay to get featured. Hell, people pay to be the BS Forbes 30 under 30 (such a joke).

This is a crappy go-to-market strategy slide.

I hate quote slides. They’re the lowest form of traction slide. Anyone can make them up anyway from “customers” or pay some hack to write a blog for you.

The problem with having mini-PLs is that investors all have views. For example, he plans on a big push and he thinks he will be EBITDA positive the next year and putting out $20m the year after. What are you raising for then?

He did a little convertible note before raising and there’s the infrastructure to 5x revenue within a year?