Over the past few years, tech startups have been the biggest beneficiaries of venture funds and angel investing. During this time, however, CircleUp has been focusing on consumer brand deals. The company runs an equity crowdfunding platform that allows accredited investors to put their money in various consumer brand deals, since the consumer brand industry has experienced significant challenges in sourcing funds.
There are several startups in consumer brand niche including apparel makers, boutique, coffee producers and national supplement companies. CircleUp is helping these companies raise the capital they need from a pool of investors. In addition, investors can help promote the companies by introducing their products into their business and personal networks. The crowdfunding platform has also made it easier for financial backers to put their trust and money into the industry.
The company has introduced various initiatives as a way of promoting the platform and attracting more participants. In September, they launched a secondary market where participants can trade their private shares. They have also formed a partnership with Collaborative Fund, a venture company, which is set to provide $4 million to be invested via the platform.
In addition, the company is planning to introduce the Marketplace Index Fund by the end of this month. The fund has a target size of $25 million, and is open to accredited investors who must have a minimum investment amount of $100,000. It also has a management fee of 0.5 percent and a 0 percent carry fee.
The fund will be used to finance different deals on CircleUp. Investors will have an opportunity to choose diversified investment deals depending on their preferences.
CircleUp has estimated that firms which have successfully raised funds on their sites have been able to generate an annual revenue growth of up to 86 percent, starting from the time when the money was raised. Additionally, unrealized investment returns have been estimated to be over 50 percent.
Since its launch in 2012, Circle Up’s investment flow is estimated to be about $300 million. Of this amount, about $200 million is said to have been raised during 2015.