She Launched a $20m Cannabis VC Firm After Her Parents Passed Away

Emily Paxhia

In Episode #757, Nathan interviews Emily Paxhia. She’s the founder of Poseidon Asset Management and she shifted her focus entirely to the cannabis industry, in 2013. Since that time, she’s taken her experience of researching markets, companies and strategic opportunities and turned them entirely to the world of cannabis. Her focus on understanding where the market is headed rather than where it has been, has been critical to developing a diverse portfolio of companies that span the sector. With over 15 years working with Fortune 500 companies—developing products, resolving strategic errors and addressing new target audiences—her work has been fundamental to stewarding her companies’ portfolios along the paths to success.

Famous Five:

  • Favorite Book? – The Hard Thing About Hard Things
  • What CEO do you follow? – Mark Zuckerberg
  • Favorite online tool? — Asana
  • How many hours of sleep do you get?— 3-5
  • If you could let your 20-year old self, know one thing, what would it be? – “I wished I had took it easier”

Time Stamped Show Notes:

  • 01:04 – Nathan introduces Emily to the show
  • 01:53 – Poseidon is a VC firm for cannabis
  • 02:02 – Emily was from an industry where companies were looking to expand their market share
  • 02:09 – Emily saw the cannabis industry as an opportunity—there was a demand for products
  • 02:30 – Emily’s parents passed away from cancer and she was told by some that cannabis could have helped her parents
    • 02:43 – A dying cancer patient is prescribed medication that has side effects, then is issued more meds to handle the side effects—which is a difficult cycle
    • 02:58 – Using cannabis appropriately could actually help with the side effects
    • 03:05 – More and more cancer patients are experiencing relief while using cannabis
  • 03:38 – Emily and her brother were 16 and 21 when their parents passed
  • 04:07 – Prior to Poseidon, Emily was with Miner % Co. Studio
  • 04:44 – As a financial professional, Emily had to assess her risk tolerances
    • 05:04 – It’s important to be mentally and financially invested
    • 05:09 – Emily also had great support to bring Poseidon to life
  • 05:53 – Current fund size is $20M going $25M
  • 06:11 – Emily’s brother is her business partner
  • 06:36 – Emily shares a story when her brother brought in a company that Emily disagreed with at first
    • 06:38 – In 2015, they’ve invested in a company called Surna
    • 06:43 – The company had gone public and was in a lot of trouble
    • 07:00 – Morgan had the idea to buy out the founders of Surna
    • 07:15 – Morgan joined the board and helped the company get on track again
  • 07:40 – Emily shares a time when the reverse happened; she brought in a company that Morgan was hesitant with at first
    • 07:48 – The company was Wurk
    • 08:00 – Emily was interested with Keegan’s presentation
    • 08:35 – Keegan was in Episode 735 of The Top
  • 09:20 – There is an assumption that Emily and Morgan are always high—this is NOT true
    • 09:44 – Emily takes cannabis for stomach pain, but it doesn’t get her high
    • 10:26 – Emily sees the cannabis industry as a wellness industry
  • 10:50 – Emily is interested with business technology solutions that help businesses run smoothly
    • 11:00 – She’s also interested in agricultural technology solutions as well
  • 12:06 – “Honestly, if I could, I would solve the banking issue in California”
    • 12:21 – Banks are still dropping businesses and credit cards
    • 12:35 – It gets challenging when someone loses their banking relationship
  • 13:00 – Emily is currently in San Francisco
  • 13:23 – Poseidon is modest in stating their expected returns
  • 13:31 – Emily wanted to capture the growth of industry
  • 13:59 – Poseidon has been running 40-44% IR
  • 14:13 – Poseidon has 3 phases of diligence:
    • 14:20 – They receive lots of emails and Emily tries to read and respond as much and as quickly as possible
    • 14:56 – Emily meets the founders and the team as part of their due diligence
    • 15:06 – The last phase is from getting into the details of actual financial projections to sourcing potential co-investments
  • 15:25 – Poseidon currently has 30 active companies in their portfolio
    • 15:28 – Over 40 in the lifetime of the portfolio
  • 15:55 – Typical deal size is $500K to a million dollars
  • 17:02 – Emily and her brother are talking about a company they want to launch
  • 17:38 – Emily’s three babies from their portfolio are:
    • 17:42 – Flow Kana: a processing center working with small farmers
    • 18:17 – Headset is a machine-data analytics company
    • 18:37 – Emily really likes Wurk
    • 18:49 – Baker is also exciting because it creates market opportunity
  • 21:40 – The Famous Five

3 Key Points:

  1. To become successful, one must research the field in question.
  2. There’s a great demand for new product and technology in the cannabis industry as the supply is low.
  3. Carry your past experience and knowledge into your current and future endeavors—employ the skills that transfer across disciplines.

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives