As venture capitalists, we understand how valuable an injection of capital into an early-stage, fast-growing business can be. But our industry has a particular set of economics, one that has skewed the availability of equity investment towards startups in the technology sector. Yet, despite a lack of access to upfront capital, entrepreneurs are constantly innovating in all areas of our economy. One of the most vibrant verticals is consumer products, with over 50,000 new consumer and retail companies started every year. These businesses are drivers of economic growth.
CircleUp has created an equity crowdfunding marketplace, enabling investors to own pieces of small but fast-growing consumer and retail businesses. Since last April, entrepreneurs have used CircleUp to raise over $10 million in equity, each in an average of only 61 days. The list of successful companies include Episencial, a producer of skin care products developed by its CEO, Kim Walls, a skin-care expert; Peeled Snacks, natural snack foods, founded by Noha Waibsnaider after working at a larger consumer products company; and Raen Optics, a maker of awesome eyewear started by two friends out of their boutique creative agency. These companies average over $1 million in yearly sales and more than 70% in annual growth.
This technology-enabled marketplace has created an entirely new system of allocation of capital and expertise. CircleUp has standardized the investment process (no paper is used), provided transparency and the ability to easily share data, and lowered the cost of investing for both investors and companies. Plus, these are products that investors can use themselves (making due diligence fun). For investors, the platform is designed to create trust and provide information in an open manner. For companies, the marketplace gives them efficient access to interested investors to help them grow, saving them months of manual fundraising time.
This kind of peer-funding network has the potential to expand the types of investors and entrepreneurs that can participate in private investing. We are excited to announce that we have become investors in Ryan, Rory and the team at CircleUp.