Freitag, 5. April 2013

Happy Birthday Circle Up!!!

Regulators are busy putting their final touches on the JOBS Act. By then Circle Up operates as a broker dealer. They are doing transactions under the regulations of the SEC. They are positioned as a crowdfunding firm. SEC regulation allows them at best to accept up to 35 non-accredited investors (accredited investors have a minimum $200,000 a year salaries. Now they are celebrating their first anniversary.

WWD on April 17, 2012

FUNDS AVAILABLE: It can pay for emerging consumer products companies to be crowd pleasers. CircleUp, an online crowd-funding platform launching Wednesday, is connecting companies generating $1 million to $5 million in annual sales with potential investors to raise $100,000 to $1 million in growth equity. Co-founder and chief executive officer Ryan Caldbeck said 150 up-and-coming companies have already contacted CircleUp and noted of particular interest to CircleUp are personal care, retail and apparel businesses. “A huge pain point for these companies is taking the time to go around and do hundreds of investor meetings and tell the same story over and over again,” said Caldbeck, who previously worked at TSG Consumer Partners and Encore Consumer Capital. “We enable you to reach a much bigger audience because there are literally hundreds of accredited investors on our site.”

Accredited investors are required make $200,000 annually individually, $300,000 as a couple or have $1 million in assets, excluding primary residences. Businesses seeking to gain access to those investors via CircleUp must provide a business plan and financials, and submit to background checks. CircleUp will also feature videos by entrepreneurs talking about their companies, conferencing capabilities for those entrepreneurs to further discuss their visions with interested investors and post-deal investor relations assistance. CircleUp has received $1.5 million in angel funding from venture capital firm Maveron, former JP Morgan vice chairman of investment banking David Topper and other angel investors.

 In the press on April 2013

Companies that focus on consumer products use CircleUp to reach smaller investors to help fuel their companies.

CircleUp works with companies that have proven revenue streams, and are growing at a healthy clip. According to the funding platform, the average company that it rejects has $1.5 million in yearly revenue, and growth of around 50% per annum.

70% of the firms that it accepts onto its platform closed, with the average raise clocking in around $1 million. 6 of the 11 companies funded thus far have been owned by women. Finally, and most importantly, according to the firm, dollar flow through its crowdfunding conduit has doubled in the last 120 days.

Its next challenge will be to increase deal flow and round size with sacrificing quality, or risk investor burn out. Also, it needs a big, juicy exit to rest its hat on. 2013 is fresh yet, let’s see where CircleUp can get to by the end of the year. Read more at The Next Web

Circle Up About

CircleUp helps consumer entrepreneurs and investors do what they do, better. For years, we saw passionate consumer entrepreneurs struggle to find the support they need to grow their brand—to hire more employees, produce more product, and share their dream with more consumers. Consumer companies were often forced to reach out to friends and family—a long and often awkward process. At the same time, we saw investors that were passionate about these high-growth consumer product and retail companies, but didn't know how to get in touch with the entrepreneurs. We created CircleUp to make this process more efficient.

We believe Great entrepreneurs deserve funding from passionate investors. Technology allows for accredited investors to find, vet, and invest in companies in a new way. A community of investors, backing a company individually and collectively, can help a company grow beyond just the financial contribution. True investor diversification should include more than just public market investing.

What you get

Investors typically receive preferred shares issued directly by the company. These shares represent an ownership stake in the company. If the business is sold at some point, these shares entitle the owner to a percentage of what is earned in the sale of the business. In addition, if there is a dividend, you receive your share of the distribution. 

Investors holding shares of preferred stock are often paid out ahead of the holders of common stock on dividends or proceeds from a sale, up to a certain amount. When the 'preference' is equal to the amount the investor originally paid for the shares, the holders are said to have a ‘1x’ liquidation preference. 

In other cases, investors may receive common shares, or convertible debt in the company. The rights of these investors will differ from above. As always, please review the offerings documents carefully to understand the investment. If you have questions or concerns, be sure to consult your advisors.