Last month, equity crowdfunding platform CircleUP announced the launch of “Circles,” a new set of funds that are designed to offer its investors an alternative to direct financial involvement in companies. Instead of owning any shares in a company, “Circle” investors own a portion of the fund, which is managed by CircleUp Advisors LLC, an affiliate of CircleUp, to make investments on their behalf in select companies.
The funds carry no fees and are divided into investor-led and sector-focused products, the former of which is run by a CircleUp-affiliated lead investor, who earns carried interest, but only when the fund returns capital to investors.
As the lead in one of the seven “Circles” funds, Brad Barnhorn, a long-time beverage investor and advisor with ties to a variety of fast growing brands including Krave, KeVita and Zola, will focus on investment opportunities in “high potential companies” in the healthy food and beverage and healthy living space, according to CircleUP, which also notes the potential for targeted investments in “other dynamic growth opportunities.”
In an interview filmed at the recently held BevNET Live Summer ’14 conference, Barnhorn explained that he and CircleUp would look to raise approximately $3 million for the fund, which would be divided into 10-12 investments, each with an average value of $250,000. He noted that once the fund is completed, the proceeds would be deployed within 12-15 months.
CircleUp generally focuses on identifying investment opportunities in younger brands and some seed-stage businesses, and Barnhorn will take a like-minded approach for the fund, aiming to deploy capital in brands that have established some proof of concept.
“I’m looking for companies that have some proof points, and probably are north of $1 million [in revenue], although selectively there might be some that are younger based on a sort of thesis, or management team or some other variable that looks good.”
Watch this video to hear much more from Barnhorn about the fund, the characteristics of a brand or company that fit the investment model, and the overall mission and goals of the “Circles” concept.