Ex-Lawyer Turned Cannabis-Tech Entrepreneur Raised $12M and Exited to Weedmaps!
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From Courtroom to Cannabis Tech: Colby McKenzie's Entrepreneurial Journey & How He's Helping Founders w/ M&A Now
We got another great story in this episode with Colby McKenzie having worn multiple hats as a successful corporate lawyer, co-founder of a cannabis tech startup that raised over $12 million, exited founder after orchestrating a strategic acquisition, and now an investor and founder of a boutique law firm dedicated to guiding entrepreneurs. Colby talks about the grueling fundraising process, navigating the complexities of a strategic acquisition, and the importance of understanding key legal considerations throughout the entrepreneurial journey.
Here's what you're in for:
00:45 - Colby's transition from corporate law to entrepreneurship
02:25 - Challenges of being a first-time founder and raising capital
05:50 - Navigating the fundraising process and courting investors
10:05 - Raising over $12 million across two rounds for Enlightened
13:22 - Strategic acquisition of Enlightened by Weedmaps
18:06 - Leveraging legal expertise to drive a successful exit
24:19 - Joining Weedmaps and public companies post-exit
28:58 - Launching Transition Point Law to guide other founders
ABOUT COLBY MCKENZIE
Colby Mckenzie is a business-minded attorney and M&A expert. From practicing law at one of the top firms in the world to being a seasoned entrepreneur with numerous successful exits as both a founder/operator and private equity investor, Colby marries his legal and business careers to bring an unrivaled viewpoint to unique and unconventional transactions. McKenzie founded Transition Point Law to give business owners and funds the experience that he was looking for while operating companies himself. Prior to founding Transition Point Law, he was the co-founder of venture-backed startup Enlighten, a leading canntech company, which had a successful exit in 2022 to Weedmaps (Nasdaq: MAPS). And, thereafter, spent two years as part of senior management and the c-suite of multiple public companies. He has helped companies in a wide array of businesses including digital media, ad tech, mobile apps, IoT, health & wellness, cannabis, food/service, financial services, professional services, construction, and commercial real estate.
Connect with Colby on:
Linkedin: https://www.linkedin.com/in/colby-mckenzie-08423372
Website: https://www.transitionpointlaw.com
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Episode Machine Summary
Primary Entities: Colby McKenzie (exited founder, M&A attorney), Jason Kirby (host), Enlighten (cannabis retail tech), Weedmaps (strategic acquirer), Transition Point Law.
Timeline: Company founded late 2016 → raised ~$5M (Round 1) → raised ~$6.5M (Round 2) over ~2.5 years → strategic exit close to 5-year mark; ~1 year at acquirer, then public-company C-suite role; launched Transition Point Law in 2024.
Fundraising Learnings: Aggregate small checks first; court specialized funds (months of diligence); optimize terms beyond valuation (liquidation prefs, control, reporting); validate “strategic” investor claims via references.
Exit Playbook: Build a buyer list (partners/integrations first + 2 out-of-sector); run an informal auction; craft bespoke narratives per acquirer; maintain operating momentum during process; manage reps/warranties, escrows, and post-close integration.
Founder Ops Tips: Use milestone-based advisor grants (vesting/clawback); consider personal counsel at later rounds; keep data room staged; maintain leverage with runway (bridge if needed).
Numbers: ~$12M total capital; ~$5M + ~$6.5M; ~6-month courtship for first lead; ~5-month deal grind; 5-year exit horizon.
Topics: cannabis tech, retail middleware, POS aggregation, in-store advertising, retargeting, strategic vs financial buyers, diligence, data rooms, term sheets.
How Colby McKenzie Raised $12M & Engineered a Strategic Sale to Weedmaps
· Page: https://blog.thunder.vc/colby-mckenzie · Video URL (reference): https://youtu.be/b9IUCb2RNBg
Exited founder and attorney Colby McKenzie breaks down how Enlighten raised ~$12M across two rounds and executed a 5-year strategic exit to Weedmaps—covering early capital in a taboo market, bespoke buyer narratives, diligence timelines, advisor structures, and term sheet traps founders should avoid.
Full Transcript
Jason Kirby: Welcome back everyone to the fundraising demystified podcast. Today we have Colby McKenzie with us today. Welcome to the show, Colby.
Colby McKenzie: Happy to be here, happy to be here, my friend.
Jason Kirby: I'm excited to have you on. You and I have had a couple chats prior to having you on the podcast. I find your background incredibly interesting—starting in law, launching a VC‑backed startup, and then coming back to law and investing in startups. I think you have an interesting story our audience can learn from. It'd be great for you to share a little about your story—starting as a lawyer, what gave you the urge to start a company—and then we'll take it from there.
Colby McKenzie: Yeah, happy to run you through it. I definitely have what I would say is a bit of a unique journey, but it's given me perspective that I think few have. I started as an M&A attorney at Weill Gottschall—big New York–based firm, one of the top in the country. Being at Weill was unique in that it gave me access in my 20s to things you typically wouldn't get access to. I'm sitting in boardrooms of multi‑billion‑dollar companies—granted as the minute taker—but still, having access to these types of things was incredible. I worked on deals like Verizon–AOL and the $280‑plus‑billion divestiture of GE Capital. Really awesome things to soak in in your 20s.
Colby McKenzie: That said, I knew all along that I wanted a more entrepreneurial journey. So I walked in like a crazy person one day and said, this has been great, but I quit. I’ll stick around as long as needed to keep everyone in good graces, but I’m going out on my own. Everybody looked at me like I was crazy. I jumped out, started my own boutique equity fund and, like many with a small boutique VC fund, I got pulled into co‑founding a company and ultimately got that to an exit—became an exited founder, got my letter jacket and everything. All of this took place in like five and a half years—a really hard sprint with a lot of learnings along the way. Reaching that pinnacle was awesome and well worth jumping out and building the airplane along the way, so to speak.
Jason Kirby: Having that post‑exit founder label opens a lot of doors once you've achieved it. But let's take a step back. A lot of our listeners are still in that grind—maybe they recently left their jobs, taking that leap of faith, and are in the current grind, whether it's looking to raise capital. You kind of glossed over that. Let's talk about your experience at Enlighten, the VC‑backed startup you built. What did you do, why start it, and we'll dive in.
Colby McKenzie: Quick background—and a funny aside. Enlighten was a cannabis‑focused technology company. I still go back and catch up with friends at Weill and they're like, you're the weed guy—which, for anyone that knows me, is hilarious. But when you found a company in cannabis technology, that's the label you get. Enlighten's focus was a retail market tech stack. We built a middleware solution to aggregate POS data, normalize it, and display it in a clean way. In cannabis, everything's small batch—things constantly go on and off menus—so you need real‑time menus. We displayed that on digital menus inside dispensaries using that tech. We were early into retail advertising, running content and ads on those displays, and ultimately built a more robust stack that let us aggregate data from inside dispensaries, know who was in there, and retarget them outside to close the loop. Really cool tech.
Colby McKenzie: We were early—and that leads into why we raised capital. We wanted to move quickly. In a land‑grab, speed is expensive, so we needed to be venture‑backed to capitalize on being early with a superior stack. But as you know, taking VC money comes with strings: blitzscale, overweight growth, and build with an exit in mind within that five‑to‑seven‑year harvest horizon. Luckily, I had just been an M&A attorney, so it was easy to build to exit. Our narrative with investors from day one was granular around what an exit might look like and how we’d get to harvest. Almost to the day, I delivered an exit to a strategic that fit the profile we’d discussed five years earlier—right at the five‑year mark. Rare, but it played out.
Jason Kirby: Let's talk about the fundraise—timeline, when you founded, when you exited, and how much you raised over what period.
Colby McKenzie: Fundraising was 100% on me. My co‑founder was an incredible operator, leading that piece, and it was on me to sell the vision and raise the money—no pressure. We founded in late 2016 when cannabis was still largely taboo. I thought I’d just call PE and VC friends—naïve first‑time founder move. Every door slammed. Nobody touched cannabis in 2016–2017. So I reset and started aggregating $25k–$50k checks—anything to keep momentum. With a bit of traction, I got deep with an emerging manager launching a cannabis‑focused fund. I courted them for months—diligence, site visits, dinners, countless questions. You don't just make a call and get a wire; you date before you marry. Once they joined as the first significant check, we felt good. It wouldn't have happened without those early small checks and product in the wild.
Colby McKenzie: From there, it was race on. A larger cannabis‑focused fund joined, allowing us to close a little over a $5M round. The next round was fast—we needed $6.5M to get from A to B. It was largely internal with an additional cannabis‑specific VC for validation and strategic value. That last group also provided a helpful bridge round during the exit process, bolstering the balance sheet so we didn’t lose leverage. So: first round a little over $5M, second a little over $6.5M—approximately $12M across about 2.5 years and a five‑year total exit horizon.
Jason Kirby: I'm glad I asked—coming in with connections doesn’t make it easy. Especially in cannabis tech. But you found your people and built relationships over months of diligence.
Colby McKenzie: That first one was probably six months of courting while grinding to build the business and aggregating small checks. It’s infuriating, but investors often want to see trial by fire: can you aggregate checks, go from pilot to momentum? Check the boxes, then the money comes.
Colby McKenzie: The second round came together quickly, but in hindsight, that outsider in the round was crucial—they later bridged us during the exit to maintain leverage.
Jason Kirby: Let's talk about the acquisition. You built Enlighten, raised money, got to the table with Weedmaps, and had that saving‑grace bridge. As an M&A lawyer, how did you approach it?
Colby McKenzie: It was incredible—my Mona Lisa. A true test of my career skills. I acted as banker (running an informal auction), founder/executive (in strategic meetings), and in‑house counsel (running the deal). Since it was my company, it was even more special. For listeners: we only looked at strategic acquirers. Our company was the perfect tuck‑in—broader marketing play, non‑cannabis advertisers like DoorDash and FX, deeper embed in retailers. With strategic exits it’s about fit, integration, and specifics; you paint a narrative of life as part of the acquirer and back it with product and financials. Different from a financial buyer digging KPIs. Fit mattered most, and that was our focus.
Jason Kirby: Strategy buyers often pay more due to synergies. How did you architect the narrative for each prospective buyer and identify what to pitch?
Colby McKenzie: About seven months before our target exit date, I started. Step 1: list who in and out of cannabis would buy us for synergy premium. Most targets were already partners—integrations, white‑labels. On partner catch‑ups, after others dropped, I’d ask: would you be interested in buying us? From there, I had 7–8 maybes. I added two out‑of‑cannabis targets for board optionality. Then I pitted interest against each other with a clear timeline—“we plan to exit this calendar year; start making offers.” Term sheets rolled in; we compared and played them off each other; narrowed to two; chose the best holistic outcome—including post‑close opportunity—not just price. Weedmaps was the best fit.
Jason Kirby: You’re a deal architect. Most founders hire bankers and lawyers to do this. Leveraging your background clearly paid off.
Colby McKenzie: We actually had different narratives for each acquirer because our fit created different value for each. No cookie‑cutter CIM. Every call highlighted a different value arc tailored to that target. That bespoke approach helped prop up our value.
Jason Kirby: Did you sleep?
Colby McKenzie: No. My wife says I disappeared for about five months—and she’s right. On top of the process, you must keep the business on a J‑curve; if momentum slips, you can lose the deal. So you have to be perfect in the auction and in operating. Pressure cooker.
Jason Kirby: And you can’t fudge numbers. Reps and warranties, escrows, potential clawbacks—you’ll be working with these people post‑close. Don’t start the relationship with a misrepresentation.
Colby McKenzie: Exactly. Most deals don’t end with a clean break—you’ll join the acquirer. You don’t want to be sitting with them three weeks later saying “my bad.” It’s not worth it.
Jason Kirby: Post‑sale: you’re at Weedmaps, box checked. What next?
Colby McKenzie: Post‑sale can be tricky for founders—you lose control. Weedmaps was the largest company I’d operated in, so I soaked up operational expertise for a year. Then I did another year as a public company C‑suite exec to round out that experience. At the start of this year, I decided to get back to my superpower: negotiating high‑stakes deals and complex issues—often fundraising or M&A. I launched Transition Point Law with talented attorneys I’d worked with. The pitch to clients is simple: I’ve been in your shoes. That resonates and creates a better relationship than if I hadn’t operated. Selling your “baby” is stressful—I can bring that lens.
Jason Kirby: Same energy here—my superpower is capital raising and narrative strategy. Hence Thunder: an investment bank for founders by founders. Probably why we hit it off.
Colby McKenzie: Totally aligned ethos.
Jason Kirby: One of my favorites with founder clients: we can skip A‑to‑Z explanations. Say A and Z and we fill in the rest. Outside perspective is valuable when you’re in the weeds.
Colby McKenzie: Founders share a language you only really understand if you’ve been one. That’s part of why we work well with founders—we speak that language.
Jason Kirby: How are you servicing founders now at your firm? Examples of work?
Colby McKenzie: It marries nicely with what Thunder does. We serve as legal counsel on funding rounds; help prepare to execute M&A—either corporate development after a Series A/B or to run an exit; offer a fractional GC model for a limited set of venture‑backed companies; and we support the broader founder community—paying it forward.
Jason Kirby: What about investing—vehicles and how you pick companies?
Colby McKenzie: I have two vehicles. McKenzie Group (a holding company) invests in the legal space—picks & shovels and firms. McKenzie Ventures, my boutique VC fund (year nine), still invests—more indirect via funds or strategic micro‑PE than classic VC. One watch‑out I share: investors who say they’re “strategic” often ask for discounts or warrants. First‑time founders too often accept that at face value. A founder I’m investing in now did it right—he asked for references where I’d actually been strategic. I applauded him. Validate strategy claims.
Jason Kirby: Love that. We made the mistake at LiquidSky of giving too many advisors equity early with no management, milestones, or clawbacks. Name‑dropping has little value unless it’s truly tier‑one. Use vesting (e.g., FAST agreement), milestone checklists, and tools to track deliverables so equity only vests when value is delivered.
Colby McKenzie: Exactly—and you need different advisors at different stages. If someone’s grant lasts the life of the company, they can become dead weight. Keep the room small and relevant with vesting and cliffs.
Jason Kirby: Other common legal pitfalls for founders?
Colby McKenzie: Two big ones. First, swallow your pride: don’t measure round success only by pre‑money valuation. Terms matter—especially liquidation preferences and control. We as founders at Enlighten took more dilution early but kept the control we needed, and it got us to the exit. Second, scrutinize where you’re ceding control: drag‑along, vetoes, burdensome reporting. What looks minor in a term sheet can drain time and leverage later.
Jason Kirby: At later stages, I recommend founders get personal counsel in addition to company counsel—especially if you have paper wealth or secondary components. Don’t forget to protect yourself.
Colby McKenzie: 100%. And it’s reasonable for the company to cover that cost, similar to investors getting their legal covered. Especially with secondaries—it’s your chips, not the company’s. I’m an attorney and still hired my own lawyer for my personal side during our exit. You can be too close to it.
Jason Kirby: Outside perspective is a superpower. Also, quick plug: Colby and I are collaborating on a data room guide for capital raises and M&A—teaser vs comprehensive, common pitfalls, and templates. Link in the show notes.
Colby McKenzie: Most definitely. We come at it from different angles—legal and banking—so it’s holistic.
Jason Kirby: Where can people learn more about you and Transition Point Law?
Colby McKenzie: I’m active on LinkedIn, and we post content on TransitionPointLaw.com. Two easy spots to keep up with me and the firm.
Jason Kirby: We’ll include those in the show notes. Thanks for being here with us.
Colby McKenzie: Appreciate the time.
Jason Kirby: Awesome. Thanks for being here with us. Perfect.
Key Takeaways
- Raise momentum first with small checks; court sector-savvy funds over months, not days.
- Terms > headline valuation: protect control; watch liquidation preferences and reporting burden.
- For strategic exits, tailor a bespoke narrative per buyer and keep operating momentum.
- Treat “strategic” investors like a claim—verify with references before giving discounts/warrants.
- Use milestone-based advisor grants with vesting/clawbacks; keep the room small and stage-appropriate.
- Founders should consider personal counsel—especially when secondaries are involved.
FAQ
How did Enlighten raise institutional money in a taboo market?
By aggregating small checks to prove traction, then courting a cannabis-focused emerging manager for ~6 months to lead the round.
How much did Enlighten raise and over what timeline?
Approximately $12M across two rounds (~$5M then ~$6.5M) over ~2.5 years, with a ~5-year path to exit.
What made the exit strategic?
Synergies: a retail tech stack that expanded the acquirer’s marketing/data reach and in-store presence, making Enlighten a perfect tuck-in.
What fundraising pitfalls should founders avoid?
Over-fixating on valuation while ignoring liquidation preferences and control terms; giving advisors equity without milestones or vesting; underestimating diligence time.
What is Colby McKenzie working on now?
He founded Transition Point Law to help founders with fundraising, M&A, and fractional GC work.