CINCINNATI - Procter & Gamble Co. is not too big to learn from the little guys.
So goes the thinking behind a new partnership with CircleUp , a crowdfunding web site through which accredited investors buy equity stakes in young consumer-products companies. The San Francisco –based company has raised $8 million for nine companies since its inception last year.
Among its success stories is Pangea Organics , a Boulder, Colo. –based maker of organic skin care products. Another is Episensial , a Los Angeles –based company that makes natural skin-care products for babies.
P&G announced the partnership in late January. The $82 billion producer of Olay skin care products and Pampers diapers will play a mentoring role for young companies with less than $10 million in annual revenue. In March, P&G will participate in an incubator event where CircleUp startups can trade insights with company executives.
“We’re not partnering with CircleUp as an acquisition strategy,” said Andrew Backs, a San Francisco –based manager of new business creation for P&G. “This is an effort to help fuel our innovation efforts. It allows us to garner insight on current consumer behaviors and interests.”
CircleUp CEO Ryan Caldbeck said the P&G partnership sparked a threefold increase in the number of investors signing up for its site and a similar increase in companies applying to participate in its fundraising platform. The company aims to streamline the fundraising process by pulling together small investors willing to buy equity stakes in pre-screened startups.
Backs said the crowdfunding process will provide useful information for P&G, always on the lookout for consumer trends that could affect its beauty brands, baby-care products and other household goods.
“The brands that are on the platform essentially are proving themselves as a new investment opportunity,” he said. “So, as CircleUp is collecting data on those investment opportunities, it is interesting to a company like P&G.”
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Top Money Headlines
The former chief financial officer at Kenwood Towne Place could face up to 51 months in jail, according to a newly unsealed plea agreement in the bank fraud case that flowed from the failed project.