Corporate giants partnering with crowdfunding innovators

Consumer goods giant Procter and Gamble is looking to invest in new ideas and new products by teaming up with crowdfunding upstarts CircleUp.

“P&G has been struggling to focus its product innovation efforts, after admitting last year that a dearth of radical ideas contributed to mediocre profit growth,” reports the FT. “Drawing on the knowledge of Silicon Valley, as well as the eco-friendly product development of the Bay Area, is one of the strategies it has adopted to correct this.”

CircleUp uses crowdfunding – the process of selling shares in a company to online investors – to help new businesses find investments. Procter and Gamble is an American multinational that owns the Gillette, Duracel and Oral-B brands among others.

Filling the gap

CircleUp is filling the gap between angel investors, who typically take on smaller projects, and private equity firms who tend to be interested mostly in larger firms. It pools small individual investments of around $1,000 each to come up with sums totalling upwards of $50,000.

“”I love CircleUp!” says Jerry Greenfield, co-founder of Ben & Jerry’s ice cream on the company’s website. “Thirty years ago Ben & Jerry’s raised money through our Vermont community in a similar model. Having passionate customers, friends and supporters as part of our business was important to our success.”

Mentor services

P&G are said to be offering mentor services to promising start-ups on CircleUp’s books.

Andrew Backs, manager of new business creation at P&G, says his firm is looking to access not only the products of CircleUp’s clients, but the talent behind them. Backs is part of a team monitoring potential investment opportunities in the digital and mobile markets. One of these, ShopKick, has forged a deal to offer discounts and advertising to shoppers buying P&G goods.

Meanwhile, the FT reports that another consumer giant, General Mills, is referring small businesses to CircleUp and monitoring their success, perhaps with a view to investing at a later date.