Although we regularly write about real estate crowdfunding platforms we still decided to take a look at a great equity investing platform which focuses on early stage companies in the consumer goods sector. Keep reading for our full review of CircleUp.com.
CircleUp.com could be called a niche platform in that its offers are basically consumer brands only. This means you are funding companies that sell an actual product. In general these companies will be more established as they have running operations and not just an idea. This isn’t really seed investment to start a company but more of an early stage investment in a private company. The offerings will usually be generating revenue which allows you to make a much better assessment of future earnings and company valuation. This model helps mitigate the risk that is normally accompanied by investing in start-ups. What we love about CircleUp.com is that we feel this niche is specifically suited for crowdfunding as it can properly take advantage of many of the opportunities to rally the crowd behind a specific product or consumer good. To read more about this you can check out our article Crowdfunding vs. VC or Angel funding on the various advantages of using crowdfunding to raise capital as opposed to VC or Angel funding.
The platform allows you to also see how popular these companies are amongst the investors and who the investors are which should give a good indication of how these companies will be received by the larger public, another factor which helps mitigate risk. The offerings are a mix of equity and convertible notes. Again they are looking to build a community around and within their platform which becomes a drag for anyone who wants to keep their privacy in terms of investing. They try to force you to integrate your social media profiles and they keep a lot of the deal specifications hidden until you do.
A very good platform if you are looking for a stable investment in high growth potential private companies. They also offer the ability for you to invest through a IRA/Roth allowing your investments to grow tax free. If you are looking to fund the next big tech start-up though, this isn’t the platform for you. This is a great option though to add to a diversified portfolio of crowdfunded equity investments as it is a relatively lower risk investment compared to non-real estate crowdfunding investments.