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Snoop Dogg’s Casa Verde gets into the sleep space, backing NY-based Proper
Helping Americans get their 40 winks has never been more necessary as the country faces what some health experts have called a sleep epidemic, and Snoop Dogg’s cannabis-focused firm Casa Verde Capital wants to help.
The firm is leading a $9.5 million investment into a company called Proper, which is launching with a combination of sleep coaching and supplements, pitching a “holistic” sleep health solution.
One-third of U.S. adults don’t get enough sleep according to Proper’s estimates, and the company’s chief executive, Nancy Ramamurthi, says that the COVID-19 epidemic has only made the problem worse.
“Proper aims to help solve what the CDC has identified as a public health crisis — insufficient sleep — with a truly more holistic and personalized solution,” said Ramamurthi, founder and CEO of Proper, in a statement. “Proper has combined the best of natural, safe, evidence-based sleep supplements with expert behavioral coaching, which consumers have not traditionally been able to access. Now, thanks to the increasing popularity of telehealth, sleep coaching can be delivered online.”
The sleep coaching services from Proper are provided by board-certified health and wellness coaches under the guidance of a clinical psychologist and behavioral sleep medicine specialist, according to a statement from the company.
Ramamurthi said that clinical validation is a core component of the company’s business. Indeed, the company is currently running its formulations through a clinical trial to prove their efficacy. It’s an additional step that the company doesn’t need to take, she said, because the supplements have all been studied with clinical trials supporting the use of the ingredients as treatments for sleep therapy. “That’s in addition to them being used for thousands of years,” said Ramamurthi.
Proper was incubated within the consumer health venture studio Redesign Health and will use the new capital from investors led by Snoop Dogg’s Casa Verde to boost its sales and marketing efforts and continue its research and development activities.
While sleep aids may seem like a strange market for a cannabis-focused investment firm, Casa Verde partner Karan Wadhera says it’s a highly strategic investment for the firm.
“[Cannabis] is an input as well and its use case will go beyond how people think of cannabis stigmatically,” Wadhera said. “At its core, [Proper] is a company that’s helping us target this sleep epidemic. We think CBD and cannabis at large can play a big role in addressing that in a way that traditional products haven’t been able to.”
The investment in Proper, then, points to a maturation of the cannabis industry, as investors look at the various chemical components of the cannabis plant and try to tease out a broader range of health and wellness applications. “We are starting to shift how we think about the business. It doesn’t have to be a core, specific cannabis product,” Wadhera said.
Image Credits: Proper
Ramamurthi says that her company will be exploring applications for cannabinoids in its supplements later. “As we continue our product development process one of the things we are looking at is CBD,” she said. “CBD is one of the more effective ingredients at reducing stress and anxiety, and stress and anxiety are one of the main reasons why people can’t get to sleep.”
Proper’s studies are supported by a scientific advisory board that includes Dr. Adam Perlman, the director of integrative health and well-being at the Mayo Clinic, and Dr. Allison Siebern, a clinical psychologist and board-certified sleep medicine specialist at the VA Medical Center in North Carolina.
There’s a reason why sleep is so poorly understood and ignored as a health issue in America. Around 90% of primary care physicians rate their understanding of sleep’s impact on the body as “poor to fair” and there’s only one board-certified sleep specialist for every 43,000 Americans, according to Proper’s data.
Customers who sign up for Proper’s service can select one of five sleep formulations available for $39.99 per bottle or for a subscription with a 10% discount. New users also get a free 30-minute consultation with a Proper sleep coach, the company said.
The five versions of Proper’s sleep products include a core sleep product made from GABA, valerian root extract, rafuma leaf extract, and ashwagandha root and leaf extract; a sleep and restore product that includes melatonin; a calming pill with L-theanine added to the core sleep product; a clarity product that includes concentrated grape extracts; and, finally, an immunity product with added zinc, vitamin C, B6 and D.
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Meet Bespoke Financial, a lender for cannabis companies backed by Snoop Dogg’s Casa Verde Capital
Bespoke Financial wants to provide cannabis businesses with the same kind of financial services that other businesses get, but that dispensaries and growers can’t yet access.
The regulations around cannabis operations are so stringent at the local level — and so nebulous at the federal level — that national banks won’t give businesses in the cannabis industry the same basic services (like short-term loans).
That’s why one former Goldman Sachs banker has partnered with two entrepreneurs from the traditional agriculture industry to create Bespoke Financial. And it’s why the company has raised $7 million in financing led by Casa Verde Capital — the investment firm launched by legendary cannabis aficionado, Calvin Broadus (AKA Snoop Dogg).
In some ways, George Mancheril is the new face of the cannabis business. The former banker hails from Goldman Sachs and Guggenheim Partners and worked on the desks that dealt with alternative lending.
A transplant to Los Angeles roughly six years ago, Mancheril says he saw the migration of legally sanctioned cannabis begin for recreational use and knew there would be opportunities for new lending businesses.
“Cannabis will become a broad, mature industry just like any other, and if that is going to happen, there needs to be a debt structure that can support that,” Mancheril says.
The biggest impediment to the industry’s growth is the one that Bespoke Financial wants to tackle first — and that’s access to debt.
To build the company’s first product, Mancheril looked to his co-founder’s Pablo Borquez-Schwarzbeck and Benjamin Dusastre. Borquez-Schwarzbeck and Dusastre previously launched ProducePay, a fintech platform focused on produce farmers that has financed roughly $2 billion in perishable commodities throughout 13 countries. It’s backed by around $200 million in venture capital and debt financing.
What Mancheril and his co-founders have done is take ProducePay’s underwriting model and apply it to the cannabis industry. The financial instrument that they’re starting with is known “in the business” as factoring.
It’s basically advancing money to businesses for a contract that’s signed in exchange for a cut of the money once a company gets paid for the goods or services they’ve rendered.
“While the US legal cannabis market is forecasted to grow over 20% annually, reaching $23B by 2022, the industry’s true growth potential is limited by long cash flow cycles throughout the supply chain and a lack of scalable and efficient capital sources,” says Bespoke Financial co-founder and chief executive, George Mancheril, in a statement. “Our approach will dramatically improve cash flow cycles across the supply chain and provide scalable working capital to fuel our clients’ growth.”
The $7 million infusion from investors, including Casa Verde, Greenhouse Capital Partners and Outbound Ventures, will be used to build out the company’s business and establish its first credit lines with customers. Mancheril says it already has around $3 million worth of loans revolving through its business. Right now, the company is focused on California, but says it could expand to other regions that are embracing legalization.
“In general, in the cannabis industry overall, it’s difficult to access any part of the financial system,” says Karan Wadhera, a managing director at Casa Verde. “Now that we’re moving into a place where equity financing is getting expensive, a company like Bespoke plays an important and valuable role in the ecosystem to help young brands and mature brands get access to working capital when they need it the most.”
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Hip hop finds its beat in the startup scene
Hip hop stars are taking their reputations to Wall Street and Sand Hill road.
Unlike their rock star brethren, who’ve historically been disinterested in dabbling with startups, quite a few hip hop artists have amassed good-sized portfolios. They’ve seen a few big hits too, most recently including a massive up round for zero-commission stock trading platform Robinhood, which counted Jay-Z, Nas and Snoop Dogg among its earlier backers.
But just how deep does the hip hop-startup relationship go and where is it headed? To shed some light on that question, we put together a review of Crunchbase data on the startup investment activity of famous musicians. We looked at both hip hop and pop stars, culling a list of 21 artists who are either active investors or have joined one or more rounds in recent years.
The general conclusion: Artists are doing more deals, raising more funds and backing more companies that graduate to up rounds and exits. Here are a few examples:
- Besides getting a slice of Robinhood, Jay-Z and his entertainment company, Roc Nation, also saw an early portfolio company, flight club startup JetSmarter, go on to raise financing a year ago at a reported valuation more than $1.5 billion. Roc Nation also made headlines this week for investing in Promise, a startup providing alternatives to incarceration for people who can’t afford bail.
- QueensBridge Venture Partners, the investment fund co-founded by Nas, was an early-stage investor in video doorbell maker Ring, which Amazon just bought for $1.1 billion. The firm could also see some paper gains this week in the much-anticipated market debut of Dropbox, which it backed in a 2014 Series C round. In addition, QueensBridge participated in a $25 million Series B round for cryptocurrency trading platform Coinbase back in 2013. Coinbase’s last reported valuation was around $1.6 billion.
- Casa Verde Capital, a cannabis-focused venture fund co-founded by Snoop Dogg, has closed its debut fund with $45 million. Just this week it backed a $3.5 million round for vape manufacturer Green Tank.
That’s not to say everything a star touches turns multi-platinum. We found quite a few flops in their portfolios and assembled a list here of 10 startups now shuttered that counted a hip hop or pop star among their backers.
Becoming and remaining famous requires many of the same skills and qualities as running an entrepreneurial venture, including an exceptional degree of tenacity.
Of course, flops are part of life for early-stage investors, so there’s no reason we’d expect celebrities to be an exception. Moreover, most of the now-shuttered companies were not heavily capitalized by venture standards.
However, there are some higher-profile or more heavily funded companies on the flop list. One is Washio, a laundry delivery service, which raised $17 million from Nas and 20 other investors before hanging itself out to dry in 2016. Another is Viddy, an app for shooting and sharing video clips backed by Roc Nation.
Why the rich, hip and famous like startups
A number of venture pundits and pop culture mavens have previously pontificated why celebrities, and hip hop stars in particular, are drawn to startups.
One possibility is that rap music and startups resemble each other at the earliest stages, postulates Cam Houser, CEO of the 3 Day Startup Program. Rap music starts with a rapper and a producer. This duality, he says, is similar to the beginning stages of a startup, which commonly also brings together two people, a business and a technical co-founder.
Rap and startup entrepreneurship are also both longshot career tracks that celebrate raw ambition and unabashed self-promotion. To make it, however, both require an excellent grasp of what sells in the real world.
Branding is perhaps the most common rationale provided for the celebrity-startup connection. With their massive fan bases, swooning coverage and millions of social media followers, celebrities can certainly help get the word out about a new product or app. That said, the attention usually works only if said product also has compelling attributes of its own.
One of the less controversial explanations is that becoming and remaining famous requires many of the same skills and qualities as running an entrepreneurial venture, including an exceptional degree of tenacity.
It’s also true that in venture capital and the music business, it’s the hits that matter. It helps that we’re seeing plenty of those.
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Snoop Dogg On Why He’s Investing in GameOn
A new sports conversation app called GameOn has secured an investment from rapper Snoop Dogg, TechCrunch has learned. The rapper has added onto the seed round, which also included former NFL players Joe Montana and Lawyer Milloy. Snoop told TechCrunch that he’s investing in the app because he “loves sports” and he thinks it’s a good way to chat about the games.… Read More
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Snoop Dogg Is Raising A Fund For Investing In Weed Startups
“Invest in what you know.” That’s a common piece of advice given to new investors that Calvin Broadus, Jr. (a.k.a. Snoop Dogg, a.k.a. Snoop Lion) seems to be taking to heart. Sources tell us the prolific rapper, youth football coach, and marijuana aficionado is putting together a fund specifically to invest in cannabis startups. According to one source, he hopes to raise… Read More
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