What Does a Multibillion-Dollar Corporation Want With Crowdfunding?

Equity crowdfunding company Circle Up announces a partnership with the behemoth Johnson & Johnson.

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By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

As of this morning, consumer products giant Johnson & Johnson was worth almost $300 billion. Billion, with a "B." So, what does it want with San Francisco-based crowdfunding startup CircleUp?

Ideas. New, innovative product ideas. And access to entrepreneurs that are building those ideas into companies, so that it can ostensibly buy those companies.

In a deal announced yesterday, Johnson & Johnson has partnered with CircleUp, an equity-crowdfunding platform geared toward startups in the consumer products space.

Related: Crowdfunding Platform Connects Entrepreneurs With Consumer-Product Giants

The move gives Johnson & Johnson a way to keep its pulse on new and emerging products in its markets. CircleUp, which helps private companies raise money by connecting them with accredited investors, focuses primarily on startups in the food, beverage, apparel and personal care industries.

New Brunswick, N.J.-based Johnson & Johnson wants access to that pipeline of new and innovative products so that if and when it wants, it can acquire the smaller companies and add those products to its own roster.

Related: Staples Wants You to Crowdfund Your Way Onto Its Shelves

"Crowdfunding represents an entirely new pathway for building a company with innovative products and services, and CircleUp is at the forefront of this new movement," Ben Wiegand, vice president of consumer R&D strategy at Johnson & Johnson, wrote in a blog post. "This strategy is particularly interesting to us as we like to provide entrepreneurs with a broad array of resources to help them be successful, and to increase the potential of working together to find ways to commercialize their product or service."

For entrepreneurs raising money on CircleUp, the partnership will give them entry to Johnson & Johnson incubator days and direct access to mentors within the company.

This is not CircleUp's only partnership with a giant corporate behemoth. It's also partnered with Procter & Gamble and General Mills.

Related: Crowdfunding's Next Hot Frontier: Real Estate

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

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