CircleUp Lets Accredited Investors Fund Groups of Growing Startups
Online funding platform helps consumer startup companies grow quickly
Many investors are looking for investment tools that will put their money to work for causes they believe in. That cause could be your company.
CircleUp has changed the game for how small food, beverage and most any non-tech startup raise funding online. More than 130 startups have raised over $150 million dollars. Even General Mills taps into CircleUp for interesting new investments, according to John Foraker, CEO of Annie's, a General Mills company.
In late 2015, the CircleUp Marketplace Index (MIX) Fund changes the game again. Now accredited investors can "invest in a basket of up to 125 early-stage companies with a minimum of $25,000."
This fund comes at the perfect time, when people want to support businesses they believe in, find alternatives to investing in the stock market and want the potential for big payoff in the future.
How perfect is the MIX idea? So perfect that the fund sold out within days of being announced.
Turning Average Investors Into Angel Investors
According to CircleUp, the average investor banks $100,000 on companies seeking to raise funds through the online investment platform. Much as Exchange Traded Funds or Mutual Funds simplify investing in a basket of companies, the Marketplace Index Fund leaves the mix of companies to CircleUp experts.
Thus, mainstream investors with $25,000 to invest, who want to be involved more in creating the future of food, can now do so without the risk of investing a large nest egg in one company.
Only recently have these new opportunities for smaller investors become possible, thanks to the JOBS (Jumpstart Our Business) Act.
Need Funding to Get to the Next Level?
The possibility of raising funds on CircleUp may be the nudge you need to get started and show momentum. Attracting investors is definitely not the same as posting a crowdfunding campaign on Kickstarter or Indiegogo. The other platforms can result in major funding, but they can also be used for smaller funding needs like for a co-packer run or to produce packaging.
The company says that on average companies raise $1 million in 2-3 months.
To begin with, you need to already have revenue to prove your concept, to the tune of $500,000-$10 million. (They say they will make exceptions.)
Browsing through the companies raising money on CircleUp is a great start to seeing if your company might be a fit.
Local Investor Circles Focus Funds in a Community
Another interesting angle for investors interested in growing the local economy is the chance to create a circle, or collection, of CircleUp startups.
A company rep explained that circles on the CircleUp platform can be created based on any investor, industry focus of region. "Circles are highly selective – each accredited lead investor is screened by CircleUp’s management team. Circles lead investors have deep expertise of the consumer space either as a seasoned investor, successful entrepreneur or, often, both and lead investors also have unique and meaningful networks that allow them to introduce relevant investment opportunities to our community."
Take a look at the Brooklyn Food & Beverage Circle, for example. This group of investors specifically funding Brooklyn consumer start-ups. The circle is led by seasoned industry experts and investors who have helped Brooklyn Brewery, New York Distilling Company, Brooklyn Roasting Company and others.
If your community has a budding consumer startup community that's itching to grow, the circle approach could be the organized effort to grow together.
CircleUp Success Stories
Read about a few of the companies who have raised money to fund expanded operations and marketing:
Oh, and CircleUp has raised plenty of funds themselves, to power their own innovative services that are becoming a foundation for non-tech startup growth.