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Ryan Caldbeck, CircleUp CEO, on his company and how it is connecting private investors and small companies.
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Stanton.
The capital raising strategy lets investors take small steps in private start -- over the Internet what my next guest says it is a great opportunity to make money joining us.
Ryan called -- founder and CEO.
-- circle up great to have you.
The first tell me which company -- minister collective surplus helps connect individual investors and small private companies.
OK so you represented consumer companies -- -- -- The proxy brought -- some of the products that they sell how many companies do you represent.
We have fifteen on the -- right now we've closed for deals last three months -- what does that mean effectively closed deals.
So it means that the companies have successfully met the amount that they were looking to raise OK so how this work in terms because we know the SEC's raise some flags about this -- college crowd finding.
-- -- what's an investor just goes online and invest.
A company like you -- your sort of like in middleman for some of these companies right and it's is it really an.
Seems like it's a dark pool in -- way.
It's more that the investor goes -- -- site finds an opportunity that they want to invest in an investment business who receives equity and return so does the investor get to specify which particular company here she's most interested yes.
And it -- in what is your role in that case.
And then we have just -- connect that we act as a -- -- board where they can find opportunity reviews investment materials signed the legal documents online and that's the legal documents online and that's key right and that's how you protect your investors.
Well that's how they receive equity exactly there's number of ways we help to protect investors I think most importantly we went through the process to partner with an existing broker dealer.
But -- to conduct background checks additional intelligence so what's a typical investment.
What's a likely return and over what time period.
The average investment on our site is over 101000 dollars the average company is raising about 750000.
Dollars.
You know we haven't have been locked open long enough to talk about returns but we can point to or Kauffman Foundation returns they looked at seed stage investing consumer.
The average return was three point six times -- -- four point four years and in this climate that's actually not too bad.
So what do you think about these allegations of fraud in the red flags being risen about fraud associated with crowd -- there I think it's a very fair -- I do I think that there is it's right to have concerns and for the FCC to put in place rules to protect both the investors.
In the company's.
And the companies that you're working with how -- they feel about getting their investment dollars this way via the Internet companies like in this particular industry consumer products they're ecstatic about it.
In consumer.
The industry is about 20% of our economy but only 4% of Angel funding.
It's very difficult for smoke it's where justice is to contingent funding.
In other -- like -- it's less relevant.
Interesting stuff thank you Ryan good -- to you check back in and hear more about how those returns are coming and thanks for.
