CircleUp, a marketplace for investors and non-technology entrepreneurs, announced the launch of a new investment product: Circles. Circles are managed funds that provide investors the best way to invest in a private equity fund.
Circles are both investor led and thematic, enabling investors to access multiple investment opportunities at a lower investment minimum, with no fees for investors. Circles help investors increase diversification within their private investment portfolio.
Investor led funds allow individual members of our community with deep industry expertise to create a fund for pooled investments on the platform. These funds operate with no fees for investors. The Lead Investor earns a set amount of ‘carry,’ or carried interest, only when the fund returns capital to investors. The initial Lead Investors are Brad Feld, co-founder of Foundry Group, Brad Barnhorn, industry advisor at Silverwood Partners, Patrick Finn, managing director of Finn Capital, Kevin Park, founder of the SimplePitch, and Ben Pruess, managing partner of Workshop Holding Company.
The thematic Circles provide investors a sector-focused fund that has no fees and no carry. The initial Circles focus on natural and organic and B Corps (companies that benefit society). “CircleUp’s B Corp Circle is the first dedicated fund to invest exclusively in Certified B Corps,” said Jay Coen Gilbert, Co-Founder of B Lab. “We are excited about this milestone for the B Corp movement, as more sophisticated investors recognize the potential for B Corps to drive not only social and environmental impact, but also financial return.”
“Circles provide a new way for investors to invest in more than one of the consumer product and retail companies on CircleUp. Investors have long sought diversification through managed funds,” said Ryan Caldbeck, CEO and co-founder of CircleUp. “With no management fees and low minimums, Circles bring the best practices of the fund business to a new segment of the market. Today’s launch marks a major step forward for both entrepreneurs and investors across the country.”
Since CircleUp’s marketplace launched in April 2012, the company has helped more than 30 companies raise over $30 million in growth capital. CircleUp continues to see a strong market opportunity for investing in businesses that are understandable and accessible for both experts and main street investors, providing equity returns for investors and growth capital for entrepreneurs in a large, and underserved market. The average company that has raised capital on the CircleUp platform has grown at 80 percent year-over-year post-funding.