CASE STUDY

SAAS PRODUCTIVITY SOLUTION FOR THE CANNABIS INDUSTRY

STRATEGIC REPOSITIONING TO PREPARE FOR COMMERCIAL LAUNCH

The Situation

Software venture aimed at managing a complex regulatory landscape was in operational failure. The founders had a leadership and strategy problem, and had no governance structure in place. They needed to raise capital, and required a solution for a troublesome group of existing investors.

ENGAGEMENT

 

OBJECTIVES

The CEO asked us to take interim managerial control of the company, assess the technology platform, and prepare a road map to revenue and a capital raise.

APPROACH

We began with a deep assessment of the current organization, its software offering and the overall market opportunity to prioritize an appropriate plan for success.

Observations

  • An early investor who maintained a significant equity stake in the organization was a distraction and was prohibiting efforts to move forward.

  • Operational gaps representing barriers to capital raising needed to be resolved.

  • The software code was unsecured and vulnerable due to part-time staffing.

  • Standard software development and delivery procedures were not in use.

  • Leadership needed to holistically rethink its go-to-market strategy.

  • The CEO needed a dedicated leadership team and was distracted by his other businesses.

  • The operating assumptions and financial projections did not reflect the emerging national opportunity.

  • The legal infrastructure and corporate documentation needed to be bolstered.

ACTIONS TAKEN

  • We negotiated the investor’s exit from the company and returned 30% of the equity to the remaining investor group.

  • We joined the board as executive directors and engaged key stakeholders and partners to validate the market viability of the existing product.

  • We took control of all weekly prioritization and cash management decision-making.

  • Legal counsel was identified and engaged on behalf of the company to ensure compliance with state labor laws, and to properly document the company’s equity securities and grant agreements.

  • A third-party software solution was implemented to automate the administration and archiving of all documentation supporting the company’s capital structure.

  • We assessed current staff and identified underperforming members of the team, who were then exited from the organization.

  • We refocused market development activities away from government contracts toward commercial enterprises as the new go-to-market strategy.

  • The product roadmap was redefined to include “must-have” functional enhancements that drove the development of a more market-focused MVP.

  • We engaged an institutional-grade development partner to support an MVP instance of the software and document the company’s methods and intellectual property.

  • We played a key role in recruiting and negotiating the compensation arrangements for the company’s go-forward management team and board of directors.

OUTCOME

  • Product has been fully redeveloped and is in use with revenue-generating customers.

  • Positioned the company to independently proceed with market development and capital raising.

  • National expansion program in motion.

  • The company’s board structure has been formalized and we maintain a lead role in their governance process.

  • We have recently transitioned to focus on the other businesses in the founder’s portfolio.