CircleUp’s Mission, Vision & Strategy

  1. Lack of transparency: Access to information about private companies is limited. Without a common currency to compare and exchange data, decision-makers rely on asymmetric information. In the absence of information, people rely on gut instinct.
  2. Lack of efficiency: Sourcing companies and making decisions without adequate data is highly intensive. It calls for in-person handshakes (in a non-COVID world), manual processes, and broken chains of communication.
  1. Prove initial problem-solution fit. While some private investors are putting cursory effort into leveraging technology, most incumbents think heuristics work well enough. We’re eating our own dog food, just as Salesforce, Facebook, and Google have done before⁴. By doing so, we’re validating our hypothesis that Helio is better at driving scalable, repeatable decisions than any industry expert. All with limited Key Person risk.
  2. Build a tight feedback loop. By starting with internal customers, we could more rapidly build-measure-learn through a tight feedback loop between the technology, our investment teams, and the entrepreneurs we serve. In addition, the more training data Helio ingests through our funds’ daily interactions with CPG brands, the more effective it becomes at collecting intel on the broader industry⁵.
  3. Reinvest in the technology. Private investing is a very lucrative business: asset managers have high margins (typically ~40–60%⁶) and stable, recurring revenues. You can think of management fees as 10-year SaaS contracts — and there’s additional upside from carry⁷. By monetizing our technology initially through fund structures, we can methodically plan for ongoing investment in Helio as we begin to expand outward.
  1. Expand existing investment strategies: Today, we have a discretionary fund and similar sized credit fund, both backed by leading institutional LPs. As we scale both strategies, the vehicles will be a mixture of discretionary and systematic approaches, leveraging data-driven techniques to build a more scalable and repeatable form of private investing than has ever before existed. By stacking our initial funds, CircleUp’s revenue engine will compound on itself to provide fuel for subsequent phases of growth.
  2. Expand by stage: We’ll raise growth-stage and seed-stage funds, also with a combination of discretionary and systematic approaches. This is an important next step for Helio to capture the full private company lifecycle, but we won’t give up our share of the early stage. By removing friction from the investing process, our technology will allow us to write smaller checks for smaller brands even as we march up-market.
  3. Expand by geography: After scaling our existing strategies and expanding by stage within North America, we will break into other geographies that have large consumer industries with substantial data and strong historical returns. While Helio will have to adapt to new languages and market dynamics, we’ve designed our technology to have extensible capabilities beyond our current market. Further, the standardization of CPG business models (e.g. make a product, sell the product) will make our first international foray much more manageable.
  4. Expand by industry: After penetrating the global consumer market, we’ll introduce Helio to new industries. We’ll start with sectors adjacent to CPG such as restaurants and retail, then we’ll tackle other industries that meet the criteria for rules-based decision-making. In the near-term, though, the CPG equity market is more than $150B globally, while credit is an even larger opportunity — and we’re only getting started.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Ryan Caldbeck

Ryan Caldbeck

Founder and Executive Chairman @CircleUp. Follow me on Twitter @ryan_caldbeck