This post is long overdue. Back in April, Gateway and MJIC parted ways and since then many people have asked us about it, and about what the organization will look like in the future without our original partner.
When Ben and I started Gateway, we came into the industry with extensive experience building, advising, mentoring, and funding early stage tech companies in Silicon Valley. What we didn't have was cannabis expertise. We knew that we were coming into the cannabis community as outsiders and that we'd need help from within the industry to construct the best program possible.
Aside from financial support, a partnership with MJIC offered us access to myriad cannabis luminaries and experts who could help us succeed. At the time, MJIC was an investment company and I had been advising them on early stage investments. MJIC's founder, Frank Marino, was an enthusiastic supporter of what we were doing and was well liked in the industry. A partnership with MJIC seemed like a no-brainer.
Alas, things aren't always what they seem.
Shortly after we partnered with them, Frank left MJIC. He was replaced with new management, and that new management brought with them a new direction. Suddenly MJIC wasn't an investment company anymore; it was an operating entity rife with potential conflicts with our incoming cohort of startups, and philosophic misalignment between MJIC's new management and the Gateway founders quickly became a major obstacle to a harmonious relationship.
After a painful discussion (those are often the most productive), Ben and I concluded that Gateway needed to separate from MJIC, and so we did. Thanks to the welcoming support of the community, we had ample access to the cannabis expertise that we originally relied on MJIC for, so finding a third partner to fulfill that role was no longer necessary. However, we did view the departure from MJIC as an opportunity to re-think Gateway partnerships in general, and so we made two important additions to the Gateway team that we thought would provide the most value for our cohort companies.
The first new partnership was with Morgan, Lewis & Bockius, now the largest law firm in the United States. This partnership has already paid dividends to both Gateway and our cohort companies, and continues our practice of bringing best-in-class support from the mainstream into the cannabis industry.
With our second addition to Gateway we sought to add expertise on the fund side and even more access to traditional Silicon Valley venture capital, since the ability to raise capital is crucial for all startups, including our cohort companies. It didn't take us long to find exactly that: Crescent Cove Capital Management, run by Jun Hong Heng. Jun is a brilliant venture capitalist with whom Ben and I have worked in the past. He brings a wealth of invaluable advice and experience from the venture finance world and has been actively advocating for the cannabis industry to investors around the world. In his own words, Jun sees Gateway as "an unprecedented opportunity to develop and invest in the best startups in an exploding industry."
Crescent Cove is a top-tier fund of funds from Silicon Valley that provides liquidity to venture capital. For those who don't know what a fund of funds is, it's exactly what it sounds like--they invest in venture capital firms. They are one of the largest limited partners in Peter Thiel's 1517 Fund, for example, as well as several others, and Jun brings us a level of connection to Silicon Valley capital and expertise over and above what Gateway already had. We're now even more strongly positioned to leverage this access to capital and expertise from the tech world for the benefit of Gateway companies.
I hope this clarifies both our decision to part with MJIC and the reasons behind it, as well as our framework moving forward. As we open applications for our second cohort, Ben, Jun, and I are excited to help build, fund, and grow the future titans of an industry with the potential to transform the world.
