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Going to seed – start-up funding during Covid
The initial lockdown forced business to adapt, Gilligan Sheppard were not exempt. Capital raising for early stage / start-ups is always challenging at the best of times. During lockdown Gilligan Sheppard was engaged to raise capital for a start-up, Ora Pharm, a new business in the recently legal and regulated medicinal cannabis industry.
Michael, a member of the GS Value Added team, asked Ora Pharm’s CE and Founder Zoë Reece (pictured above) about the experience…
How did you hear about Gilligan Sheppard?
I was referred to Michael Vukcevic by my Lawyer, Jeffrey Lai at ACL. Jeffrey has had a long working relationship with Michael including a great track record of successful collaboration in early stage company capital raising and support. After initially getting to know Michael, his knowledge and experience was going to be an asset during this process, and I was also delighted to see the passion and excitement he brought during each stage.
Describe the capital raise process, and challenges faced raising capital during the lockdown period in New Zealand?
From start to finish the process was different from what it usually is. Not only because of lockdown and the challenges that were being faced with Covid, but also because Ora Pharm are operating in a new industry in New Zealand.
Lockdown meant that I was unable to meet the Gilligan Sheppard team and potential investors in person for a large portion of the time we were working together, however due to technology we were able to connect virtually through video conferencing. Although his didn’t provide the same atmosphere and environment that in-person meetings do, it was a fantastic way to start the process and since we didn’t need to travel it freed up more time to focus on business development.
Part of Ora Pharm being in a new legal industry with a lot of misinformation out there, a large portion of the capital raising process related to education. This included education around the industry, Ora Pharm’s values and relaying my experience about how the legal industry really works vs what is seen in the media.
There was a large preparation process including due diligence of the financials, creating the IM, reviewing of the shareholders agreement, and formulating the board. Michael and the GS team provided valuable guidance and support throughout the process.
How were you supported during this process?
We’ve built a great team around us, a very supportive and involved Advisory Board was put together in May constructed of Michael O’Donnell, Dr Warren King, Nadia Scott, and Mike Petersen. On top of this a great support framework with Jeffrey and his team at ACL and Michael leading the project team at Gilligan Sheppard. I also had support personally from my mentor Stuart Wilcox, who was my manager during my time at Curaleaf and is now taking on a role as Chairman of the Ora Pharm Board.
The process consisted of a lot of teamwork, communication, and collaboration. The outcome would not have been possible if we did not have this amazing team.
What is the outcome of the capital raise process?
Gilligan Shepperd engaged a group of investors who are excited about the Ora Pharm opportunity and have invested in the company. Ora Pharm raised enough capital from the seed round to build the facilities and secure our medical cannabis license. We are lucky to have a fantastic and diverse mix of investors who will also be able to provide advice and support to Ora Pharm.
Michael from Gilligan Sheppard recommended Jason Rogers as the Investor Director due to his impressive experience and background, he strengthens the financial experience in the team, and we are lucky to have him on board.
What’s next for Ora Pharm?
Ora Pharm has received our desktop assessment approval from the Ministry of Health, the next step is to complete construction and security as per our license application and then we will have the final inspection for the license. Ora Pharm are also working with an Australian manufacturer and will be producing a white labelled product to distribute with our Australian partners and import into New Zealand once we have the appropriate licenses. Once we receive the license, we will be able to import seeds, start planting and growing the first crop and mother stock. We will then go out for Series A round of capital which will fund a much larger greenhouse, fitting out of the Good Manufacturing Practice (GMP) processing facility and growing our team.
Any words of wisdom for anyone looking to raising capital?
One word – team. Get a good team of advisors around you who understand what you are trying to do, who you trust, and who will work with you every step of the way.