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Building B2B SaaS Where VCs Won’t Invest and One Misstep Means Federal Prison

Most B2B founders optimize for growth velocity and fundraising milestones. Socrates Rosenfeld had to optimize for not going to prison.

In a recent episode of BUILDERS, Socrates, co-founder and CEO of Jane Technologies, detailed how he and his brother built real-time inventory streaming infrastructure for cannabis dispensaries—in a market where Sequoia won’t write checks, Visa won’t process transactions, NASDAQ won’t list your stock, and regulatory missteps can result in federal charges.

The tactical frameworks Jane developed for navigating extreme constraint offer implementation-ready lessons for any founder building in regulated or emerging markets.

The Unlikely Technical Insight

Socrates’ path to cannabis tech wasn’t strategic—it was personal. As a West Point graduate and Apache helicopter pilot transitioning out of the Army at 30, he’d never consumed cannabis. His return to civilian life was destabilizing: “My mind couldn’t slow down. I couldn’t connect with my loved ones. I had no peace. And cannabis opened the door to peace and healing.”

At MIT, he saw the market gap clearly. Cannabis needed e-commerce infrastructure. But the technical breakthrough came from his brother, a computer scientist who cracked a problem that defined Jane’s competitive position.

“He actually figured out a way to do what we do that was never done before and to our knowledge hasn’t been proven since, where we can take real time inventory, physical inventory, sitting on a store shelf and streaming that to an online platform,” Socrates explains.

This wasn’t just a feature—it was strategic positioning. By solving the inventory streaming problem, Jane could operate as B2B infrastructure rather than a licensed operator. “We felt, okay, if we could just be a pick and shovel business and not directly touch the plant, but be involved in the industry, then maybe we could get the upside of this industry without maybe the downside risk of legality.”

The positioning decision meant operating under different regulatory exposure than competitors who touched the plant directly. It was the first of many calculated risk management decisions.

Using Adjacent Players as Regulatory Canaries

Jane’s market entry timing reveals a framework for navigating regulatory uncertainty that founders can apply to any emerging category.

The company launched in 2014-2015, deliberately timing their entry around specific de-risking signals. They observed the 2013 Cole Memo (Obama administration guidance preventing federal enforcement of state-legal cannabis operations), tracked state-by-state legalization momentum in Colorado and Oregon, and critically—watched other operators.

“We also didn’t want to be the first,” Socrates notes. “We saw Weedmaps and Leafly were out there. No one seemed to be getting thrown in jail at that time. And so we said, okay, let’s get some good lawyers. Let’s be able to understand our left and right limits, but let’s go do this now because the time is now.”

This approach isn’t about being fast-follower. It’s about identifying specific trigger events that signal inflection points: regulatory clarity documents, expansion velocity across markets, and other operators achieving scale without enforcement action. Jane didn’t move until they saw these concrete de-risking events, then moved decisively.

The framework: identify your regulatory canaries, define what specific outcomes would signal reduced risk, wait for those outcomes, then execute aggressively with proper legal infrastructure.

Converting Uncertainty Into Scored Risk

Operating in cannabis forced Jane to develop a risk taxonomy that distinguished between unknowns you can convert to knowns versus existential threats you simply avoid.

“There’s a real difference between risk and uncertainty,” Socrates explains. “Uncertainty is unknown. You try to position yourself to make uncertainty known so that you can decide and score it. Hey, is this a reward or is this a risk?”

Jane’s process: (1) identify unknown factors, (2) gather information systematically to convert unknowns into knowns, (3) score both upside and downside explicitly, (4) decide whether the scored risk justifies action.

Some risks were non-starters. When Ease (a cannabis payment processor) founders went to prison for money laundering, it validated Jane’s refusal to cross certain lines. “Getting thrown in jail and pretty much killing the business as a whole, there’s not a lot of reward that’s worth that, in my opinion,” Socrates observes.

Their decision framework on existential threats: “If we make a fatal decision and we get arrested or we do a felony or something like that, then the business is probably over at that point.”

The implementation: maintain a risk register where each strategic decision explicitly documents what’s uncertain versus what’s a calculated risk, with clear go/no-go thresholds based on worst-case scenarios.

Capital Constraints as Forced Excellence

Jane operates in a market with structural barriers to traditional venture mechanics. “This is not an industry where Sequoia Capital is writing checks. You can’t go public. You can’t take payments like Visa and MasterCard.”

The constraint forced discipline that became competitive advantage.

“Traditionally, you go public, you raise billions of dollars, and then you decide how to get profitable. Then you decide what your cost of capital is and free cash flow, man, we had to learn that at a very young age, which forced us to grow up probably sooner than we really had to,” Socrates reflects.

The result: “You’re rewarded with really good fundamentals. And as the business scales, those fundamentals should scale.”

Jane had to master unit economics and profitability mechanics years before typical B2B companies face those questions. “You got to ruthlessly prioritize what you do and do not build. You have to scrutinize every dollar that comes in and out of the business.”

While competitors in less constrained markets could mask poor unit economics with cheap capital, Jane built sustainable business mechanics from inception. The company developed extreme capital discipline not by choice, but by necessity—and it became their competitive moat as the market matured.

Building Compliance Infrastructure as Product Moat

Jane’s philosophy on regulatory complexity directly contradicts typical startup advice about moving fast and breaking things.

“We have a saying at Jane, where it’s go where it’s hard,” Socrates explains. “It’s really hard and really scary and really difficult. We can go through that. There’s some value there. If it’s really easy and everybody’s doing it, you’re not going to have a business.”

Instead of viewing compliance as overhead, Jane structured it as core product development. They worked alongside state regulators to understand legal frameworks, then built software that kept retailers in compliance. “We’ve really worked alongside our retail and brand partners to understand the legal construct and landscape the states in which they operate. And we’ll create software that keeps them in compliance.”

This approach created a defensible position. As markets matured and enforcement tightened, companies that had taken shortcuts failed. “The days of deceiving investors, lying about your numbers, building technology that’s fake, for lack of a better term, the market’s too hard and too tight.”

The tactical implication for founders in regulated markets: treat compliance work as moat-building, not cost center. Structure legal and compliance as core product development that creates barriers to competition.

The “Maybe Means No” Decision Framework

Jane’s approach to strategic decisions optimized for one outcome above all others: survival duration.

“This is not a game of speed. This is not a game of size. This is a game of endurance. And you want to just last,” Socrates emphasizes.

The company knew they were early in a market with a long maturation timeline. “We’re still early,” Socrates notes, despite operating ten years into Jane’s existence. The strategy: embrace being early, but position to outlast competitors who would burn out chasing growth velocity.

Their decision framework became binary: “If we decide to do it, we’re going to do it with full force and aggression. And if it’s a maybe, it’s a no in our book.”

This eliminated the middle ground where most strategic mistakes happen—the gray area decisions that seem justifiable but carry hidden existential risk. If a choice couldn’t be scored as clearly positive on a risk-adjusted basis, it was off the table.

The company explicitly rejected the Uber approach: “We haven’t really taken the Uber approach of like, let’s just break a lot of rules and then see what happens.”

For markets with long regulatory or adoption cycles, this framework prevents the fatal mistakes that end the game entirely. Model scenarios for ten-plus year timelines. Ensure burn rate and strategic decisions support that duration. Eliminate “maybe” decisions that could end the company.

Market Consolidation Around Fundamentals

After years of operation, Jane watched the cannabis market evolve in predictable ways. Initially split between illicit market operators (“really instinctual business minds”) and corporate players who “thought, oh, this is going to be so easy. Weed is weed”), the market is consolidating around fundamental business quality.

“The ones that will stay and remain are the best products, the best retail operations and the best software solutions out there,” Socrates observes. “That’s the free market doing it the right way.”

Companies that built on shortcuts didn’t survive. “Those companies don’t last…They don’t want to do the hard stuff, so they’ll take the shortcut. That’s bad. It’s a bad look for the entire industry.”

Jane’s competitive advantage compounded as the market matured. Operating across 40 state markets today, they proved that extreme constraints forge competitive advantages when navigated with discipline.

Beyond Building a Company

For Socrates, the mission extends beyond Jane’s commercial success. His vision: “A world where anybody who needs access to this plant has it with trust and safety and truth. Where if you’re an entrepreneur and want to start a business in this industry, you can do that.”

He emphasizes the need for reconciliation: “For those largely black and brown populations that were unfairly targeted and incarcerated over this plant, hundreds of thousands of nonviolent crimes. Let’s expunge those records, let’s get those people free, and let’s go heal the past.”

Jane Technologies demonstrates that the most constrained markets can produce the most disciplined companies—when founders systematically convert regulatory complexity into competitive moats, optimize for survival duration over growth velocity, and maintain strategic clarity even when shortcuts promise faster results.

The framework they built applies beyond cannabis to any founder navigating regulated markets, long adoption cycles, or structural capital constraints: use adjacent players as canaries, convert uncertainty to scored risk, let constraints force fundamental discipline, build compliance as product moat, and optimize every decision for endurance.