June 30, 2020

Meet Richard M. Batenburg III of Cliintel Capital Management Group in Denver

Local Stories

Today we’d like to introduce you to Richard M. Batenburg III.

Richard, please share your story with us. How did you get to where you are today?
I spent most of my childhood in boardrooms and at the office with my father when I wasn’t on the hockey rink. After playing college hockey and graduating from business school, I cut my teeth working for Merrill Lynch. I started my career in private wealth, executing IPO’s and secondary issues, as well as bringing private equity deals into our portfolio. After Merrill Lynch I saw an opportunity in Colorado’s cannabis industry. There was an inability to bring new money into that capital-restrictive environment, so I realized that I could fill a need of the cannabis industry by figuring out a way to fund it.

We used a blind-pool private equity structure and became the first qualified institutional investment capital firm in Colorado. We were allowed to hold licenses without disclosing investors with a permitted economic interest. I’ve always had a preference for the private market, so cannabis was a perfect fit for my investing philosophy. In the private sector you have the ability to effect real change on the outcomes of businesses, and working in venture capital I believe that we are the central ignition point to unite people’s ideas and resources to create value, and creating that value is incredibly gratifying to me.

Overall, has it been relatively smooth? If not, what were some of the struggles along the way?
Creating a venture capital firm with a specific focus on cannabis has been an extraordinarily litigious and demanding endeavor. We are dealing with an ever-changing regulatory environment, and that means we have to be prepared and flexible at all times. Everything in cannabis is two steps forward and one step back; it definitely can fatigue you. But the companies and brands that are the most resilient are the ones that are the most well-prepared to deal with a changing environment. When working in a highly regulated space, and the investing space as well, you have to be paying a lot of attention to your capital strategy as well as your corporate governance.

Building the initial trust with our investors was another challenge we had to work through. We were starting a fund for cannabis in the early stages of the adult-use market in Colorado, so naturally we faced a lot of skepticism when pitching our initial investors. We couldn’t disclose what assets we were buying, and we could not give the investors any type of control. That created a really difficult environment to raise money in, and I failed spectacularly the first year and a half we were doing it. Eventually we got some traction and began allocating capital into the cannabis space. I really had to ask for carte blanche on what we could do with their capital to allow us to not disclose them as investors and empower the fund manager to make the compliance decisions.

Convincing seasoned investors, family and friends to put money into a blind cannabis fund that they had no control over was tricky, but successfully earning those investments and trust was one of the most rewarding things I have done professionally. The people investing did so because they trusted us, they know that we understand the market and we will stop at nothing short of success.

Please tell us about your business.
Cliintel Capital Management Group is a venture capital firm that specializes in funding cannabis and emerging markets. What this means is that we look for opportunities that have a competitive advantage over the current market conditions. Our goal is to find products that have an emotional relationship with the consumer and then strengthen our ability to put that product into consumers’ hands.

Our specific advantage is that we have been in the space doing the business from an operational venture capital approach. We really have owned every type of company in the supply chain of cannabis, from ancillary services to cultivation to retail storefronts. That gives us a unique ability to understand market position and strategy as far as evaluating different deals and where we would like to direct capital. We have a very broad and deep understanding of what businesses in each component of the cannabis supply chain are capable of making, what the margins should look like and what proper standard operating procedures and controls should be in those specific segments.

Contact Info:

Address: 7979 E Tufts Ave, Denver, CO 80237
Website: CliintelCapital.com
Email: trevor@mygrasslands.com
Instagram: https://www.linkedin.com/in/rmbatenburg/
Facebook: https://www.facebook.com/rickythekangaroo
Twitter: https://www.instagram.com/the_cannabis_vc/?hl=en
Other: https://www.linkedin.com/in/rmbatenburg/

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