If You Want To Raise Capital For Artisanal Pickles Or A Healthy 7-11, Head To CircleUp

Built specifically for consumer-retail businesses, CircleUp connects accredited investors with the next big thing. Here’s how it worked for Green Zebra Grocery, a “7-11 meets Whole Foods.”

If You Want To Raise Capital For Artisanal Pickles Or A Healthy 7-11, Head To CircleUp
[Image: Flickr user Kismihok]

Years ago, when Lisa Sedlar was living in Boulder, Colo., she’d often see CU college kids running across the street to the mini-mart, and coming out with a Snickers and Coke. It occurred to her that it would be great for them to have access to a store designed with the same convenience factor that offered a wider selection of healthy grab-and-go foods.


After eight years as president and CEO of Portland, Ore.-based natural grocery chain New Seasons Market, Sedlar left in late 2012 to make that earlier inspiration a reality. Based on her “7-11-meets-Whole-Foods” concept, she founded Green Zebra Grocery, which offers a range of mostly locally sourced health-conscious food packaged for convenience in a small, neighborhood store setting. She toiled to raise $1 million, and opened the first store in Portland’s Kenton neighborhood on October 8 of this year. Before raising her next round of funding for expansion, Sedlar was contacted by Katie Fitzgerald at CircleUp, a crowdfunding site that connects accredited investors with promising small consumer retail businesses. Through CircleUp, Green Zebra raised and just closed on its next $1 million–in three weeks.

Green Zebra GroceryPhoto by Shawn Linehan

“It would have taken me much longer without CircleUp, for sure,” says Sedlar. “I’d have to go to a meeting, then their neighbor’s meeting, then their friend and their uncle. Entrepreneurs just don’t have time. With CircleUp, I’d hit five investors in one conference call, with the peace of mind that they’re all accredited.”

Ryan Caldbeck

Ryan Caldbeck founded CircleUp in early 2012 specifically for businesses like Green Zebra–those based on innovative ideas with existing track records, but too small to secure funding from private equity firms. “There are hundreds of firms that love the stability of consumer and retail, but they’re just too big to invest into smaller consumer companies with under $10 million in revenue,” says Caldbeck. “Those entrepreneurs also can’t go to VCs because they back tech, and aren’t willing to back the next great shampoo company. So they’d need to go to friends and family, even if they’re doing really well, and it would take 12 months. It just seemed wrong, so we founded CircleUp to help those companies find smart and value-added investors.”

One of these investors is Blair Lambert, a former COO of Gymboree Corp., and former executive at clothing retailers including Bebe and Esprit. Now focused on his own investments and advising smaller companies, Lambert looked into CircleUp’s featured businesses and zeroed in on Green Zebra.

“It sounds trite, but it really does come down to the people in the business,” says Lambert. “I thought Lisa had a great handle on the business, a wonderful vision of how to position it, and a merchandising and sourcing strategy. CircleUp really helps present companies to investors and coordinates the conversation to get to the deal very quickly.” And Lambert will do more than invest–he was invited to join Green Zebra’s board, and will use his broad retail experience to help guide the company through its growth.

CircleUp’s site launched in April 2012, with the help of funders including innovation scholar Clayton Christensen and Maveron, the VC firm cofounded by Starbucks CEO Howard Schultz. The site currently features 45 companies in 11 states and Canada, which have either closed their first CircleUp funding round or are still accepting investors–but these only account for 2% of the more than 2000 companies that have applied to CircleUp.


“We’re focused on the quality of the companies that we put in front of investors,” says Caldbeck. “We analyze revenue, gross margin, growth rate, valuation. If we’re looking at a granola bar company, how does this valuation compare to others we’ve seen?” CircleUp has also recently partnered with Spins, a company that provides retail-level sales data, enabling CircleUp to compare companies not only to other similar applicants, but to other companies across its field. That data is provided free to potential investors. Caldbeck says that the most common mistake companies make when applying to CircleUp is submitting a valuation that is far too high.

Lisa Sedlar

So far, that selectivity has correlated with success. According to Caldbeck, the average growth of companies after raising money on CircleUp is 80%, and the average gross margin has expanded from 34% to 39%. The other key, he says, is that CircleUp’s platform is designed to provide resources and support to the companies after they close funding, including a high percentage of investors who, like Lambert, have extensive experience in the retail space themselves.

As for Green Zebra, Sedlar hopes for more than just a successful business–she sees the potential of leading a change in grocery business models.

“Big stores are running out of A-locations, their primo locations, and have to settle for B-locations or B-markets, so their growth and ability to return to investors is limited,” says Sedlar. “They’re going to have to go small, but they don’t want to. They’re watching me really closely. It’s kind of the holy grail, so if we hit it, I think we have the potential to go really large.”


About the author

Evie Nagy is a former staff writer at, where she wrote features and news with a focus on culture and creativity. She was previously an editor at Billboard and Rolling Stone, and has written about music, business and culture for a variety of publications.