Great piece by Ryan Caldbeck, CEO of crowdfunder CircleUp, on using convertible debt to grow early stage consumer product companies. Shorter version: It helps defer valuation conversations when you have solid revenue, but the current revenue does not reflect the company’s potential. For the full article, click here.
If you are interested in investing in early stage consumer product companies, I highly recommend CircleUp. They have a number of great investment opportunities.
It’s really just removing the first of two obstacles that stand in the way of crowdfunding. The 2nd obstacle, which could get lifted later this year, would be to lift the accredited investor restriction. At that point, private companies could raise equity by advertising to a wider audience through crowdfunding websites such as www.CircleUp.com and www.Fundable.com. This will make it easier for small businesses to raise the capital needed to grow and stimulate the economy, but it could also open the door to fraud and high-risk investments. What do you think will be the impact of crowdfunding?
Excellent graphic by Anna Vital. Seed money round commonly convertible debt these days. More on that coming coon.
The Middle Market CFO 