Crowdfunding platform CircleUp launches ETF-style fund
Sharing economy financing platforms are moving mainstream. CircleUp, the crowdfunding site focused on consumer brands, has announced the launch of its Marketplace Index Fund later this month. Operating like an ETF, the fund will invest in funding deals on the CircleUp platform, offering investors a simple way to access a diversified portfolio of start-ups. The fund will have a target size of $25mand charge a 0.5% management fee with zero carry fee. Equity platforms in the UK have been offering similar funds for several years, hence this progression to create an in-house fund is a natural evolution for digital finance; this initiative is the latest introduced by the firm to benefit both companies and investors, in September it launched a secondary marketplace. CircleUp, which launched in 2012, claims an average revenue growth of 86%. Last month, UK P2P lender, Funding Circle, launched an investment trust designed to make investment in P2P loans more easily accessible for investors.

While headlines telling of angel investing and venture funds in startups have been focused on technology firms, CircleUp has been carving out a niche in the consumer brand space. Operating an equity Crowdfunding Crowdfunding Crowdfunding is defined as funding of a project via raising smaller denominations of money across a large body of number of people.New businesses that need access to more capital may also conduct crowdfunding. Generally, crowdfunding is performed through an online community, social media, or crowdfunding websites such as Kickstarter, GoFundMe, and RocketHub. Depending upon which jurisdiction an investor resides within will dictate the sort of restrictions that are applied to the crowdfunding pro Crowdfunding is defined as funding of a project via raising smaller denominations of money across a large body of number of people.New businesses that need access to more capital may also conduct crowdfunding. Generally, crowdfunding is performed through an online community, social media, or crowdfunding websites such as Kickstarter, GoFundMe, and RocketHub. Depending upon which jurisdiction an investor resides within will dictate the sort of restrictions that are applied to the crowdfunding pro Read this Term platform for accredited investors, deals on CircleUp are limited to the consumer space where sourcing Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term in the past has been harder to come by for firms, even as their growth may be on par with the so-called ‘hot tech startups’.

Examples of startups in the space include niche apparel makers, national supplement firms and boutique coffee producers. Through CircleUp, these firms are able to raise funds from a larger group of participants who can also assist in introducing the brand to their networks. For investors, the crowdfunding platform also makes it easier to invest in the sector.

Marketplace Fund

Gaining traction for their platform, CircleUp has begun to introduce initiatives to benefit both companies and investors. They include the launch of a secondary market in September, to improve ongoing liquidity of crowdfunding campaigns that were initiated on the platform. In addition, the firm has also partnered with venture firm, Collaborative Fund, which is to commit $4 million to be invested through the platform.

Adding to those initiatives, CircleUp is introducing the Marketplace Index Fund. Being launched this month, the fund is open to accredited investors with a minimum investment size of $100,000, with a waiting list for smaller sums and a $25 million target size for the fund. Operating like an ETF, the fund contains a 0.5% management fee, and 0% carry fee.

Based on a proprietary algorithm for evaluating companies, the fund will be investing in funding deals on the CircleUp platform. For investors, one of the appeals is the investment diversity offered in place of needing to participate in multiple individual funding campaigns.

According to CircleUp, companies that have raised funds on their platform have generated 86% annual revenue growth since raising on the platform. In addition, unrealized investment returns were estimated at 50%+.

Since launching in 2012, total investment flow on CircleUp is expected to be around $300 million, with about $200 million having been raised during 2015.