The start-up announced on Wednesday that it had raised $14 million in a financing round led by Canaan Partners, a venture capital firm investing in the company for the first time. Previous investors, including Google Ventures and Union Square Ventures, participated in the round.
The fresh capital underscores the excitement in Silicon Valley over new ways of raising money. Crowdfunding, in particular, has drawn interest, and other platforms, like AngelList, have also attracted millions in venture capital. Crowdfunding was made easier in 2012 by the Jumpstart Our Business Startups Act, or JOBS Act.
CircleUp offers investors equity in small consumer and retail companies, which are vetted to weed out potential duds. Prospective investors – provided they are “accredited,” meaning they make at least $200,000 a year or have a net worth above $1 million – can read about the companies on the CircleUp site and invest through the platform. CircleUp collects a commission from the companies.