CircleUp, An Investment Platform For Non-Techie Consumer Startups, Raises $7.5M Led By Union Square

Posted: May 7, 2013 in Startup, Technology
Tags: , ,

20130507-212217.jpg. CircleUp, a startup that connects investors with retail
and consumer companies that wouldn’t attract
traditional venture funding, has raised a $7.5 million
Series A. The round was led by Union Square Ventures. New
backer Google Ventures also participated, as did
previous investors Rose Park Advisors, Maveron, and
David Topper. Union Square’s Andy Weissman is
joining the CircleUp board, while Google’s David
Krane is becoming a board observer. The company launched about a year ago, and since
then it says 12 companies have used the platform to
raise more than $10 million in total. Those companies
include 18 Rabbits granola bars, baby food maker
NurturMe, and Willa Skincare. What links these companies, according to CEO and
co-founder Ryan Caldbeck, is the fact that they’re
“too small for private equity” and “aren’t the right
industry to pitch Sand Hill Road.” Nonetheless,
they’re real, growing businesses, usually with more
than $1 million in annual revenue and growing more than 70 percent, and they want access to more
funding to fuel their growth. When CircleUp first launched, we described the model
as “AngelList with a crowdfunding twist” — like
AngelList, it connects accredited investors with
businesses, but it also serves as the broker-dealer,
allowing the actual transactions to take place through
the CircleUp site. I asked if the company might look at expanding to a
broader audience of investors once the JOBS Act is
fully implemented. Co-founder and Chief Operating
Officer Rory Eakin said CircleUp is taking a “wait and
see” approach, but that it’s “not optimistic” because of
the additional requirements on businesses that want to raise money this way. On the other hand, he said
he’s excited about the JOBS Act’s loosening of
restrictions around general advertising, which creates
an opportunity “for small businesses in particular to
reach out to customers and supporters and inform
them of a potential capital raise.” CircleUp previously raised $1.5 million.


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