CrowdCampuses: What is the target audience for CircleUp? Are there certain requirements the business must meet in order to raise funds with CircleUp (ex: proof of concept, annual revenue benchmarks, etc.), or will you work with people who simply have an idea as well?
Ryan Caldbeck: Our audience is both accredited investors and high-growth consumer brands. CircleUp focuses on consumer product and retail companies with more than $1 million in revenue. These are high-growth consumer brands that you use and love, but have traditionally been underfunded by historical fundraising sources such as Silicon Valley (which focuses on technology). On the investor side, we focus on accredited investors. Many of our investors have strong backgrounds in consumer-related businesses, either as investors or entrepreneurs.
As I mentioned, we are carefully limiting access to the site to high-growth consumer focused companies with significant revenue. We accept less than 2% of applicants. Our team has 11 years’ experience sourcing deals in these industries for leading Private Equity firms including TSG Consumer, JH Partners and Encore Consumer Capital. Along with our network of investors and advisors, many of whom have deep consumer experience, we believe we can source high quality deal flow on the platform within this market segment.
CrowdCampuses: What type of consulting does the CircleUp team provide to SMEs (small & medium sized enterprises) prior to the business owner attempting to raise capital? Is your team hands-on with consulting?
Ryan Caldbeck: Importantly, we do not to provide advice to the companies on CircleUp, but we do provide significant value through a number of partnerships. For example, we provide free industry data through a relationship with SPINs, a third party data provider, and we provide free samples to all of our investors through a relationship with Swaggable. Post close we have a number of partnerships that help our companies grow. For example, we have partnerships with Fortune 500 companies that are excited to work with the innovative brands that come out of our platform.
CrowdCampuses: Crowdfunding Campuses is attempting to bridge the gap between the local business community and the collegian institutions. How can CircleUp help bridge that gap to strengthen the local ecosystem around collegian institutions?
Ryan Caldbeck: It is an important question because we think institutions of higher learning are where some of the best innovation is developed. Many of the businesses that are started in and around universities today are in the consumer and retail space. Although that segment (consumer and retail) is 20% of the economy, it is only 4% of angel funding. This imbalance can make it difficult for these businesses to raise capital. We help eliminate that inefficiency and allow those entrepreneurs, many of whom come out of those great universities, to raise money more effectively.
CrowdCampuses: How does CircleUp attract investors to the site, and how will the vetting & matching processes work for investors who are seeking a new venture to back?
Ryan Caldbeck: CircleUp is the largest equity-based crowdfunding site in the US and has been able to attract an incredible investor network- largely through word of mouth. While we have been fortunate to get some great attention in the press, many of our investors find us through referrals from other investors already on CircleUp. One of the exciting trends we’ve seen this year is an increasing growth rate of our referrals. Investors are joining CircleUp, getting excited about what they find, and are telling their friends or colleagues.
CrowdCampuses: A critical component of the crowdfunding industry relies on transparency and proper education. What steps can students & teachers, being non-business owners, begin to take NOW that will allow them to take advantage of CircleUp’s platform in the future?
Ryan Caldbeck: Investing in businesses, whether through an equity-based crowdfunding site like CircleUp or “offline” takes education. The best thing students and teachers can do is to educate themselves on making investments into private companies. We have an increasingly robust investor education section on CircleUp, but I would recommend people looking to invest educate themselves by talking with other more experienced investors, reading investing trade publications and talking with professional advisors.
CrowdCampuses: If you had to list CircleUp’s three biggest accomplishments/accolades to date, what would they be? This is your time to brag about yourself.
RC: We have the largest group of accredited investors in the US, we have had more capital invested through our site than any other equity-based crowdfunding site and have signed amazing partnerships with Fortune 500 consumer companies – all three accomplishments are a nice testament to our approach.