Why This $34 Billion Company Is Dipping a Toe Into Crowdfunding Consumer product behemoth General Mills is looking to invest in early stage consumer product startups on the equity-crowdfunding platform CircleUp.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock

General Mills is a $34 billion company with annual sales of almost $19 billion. The corporate giant isn't the kind of company that you would expect to be involved in crowdfunding.

But it is. Today, the company behind Cheerios and Yoplait today announced a multimillion-dollar fund through its new business development and venturing unit, 301 INC, that it will invest in early stage consumer product startups on the equity crowdfunding platform CircleUp.

CircleUp, which has had 120 companies raise more than $135 million on its platform, is a goldmine of product discovery for General Mills and will essentially serve as a de-facto research and development arm for the food maker. After all, it can be hard for towering corporate titans to be nimble enough to get an ear to the ground.

"The CircleUp marketplace will enable us to quickly connect with mission-driven brands actively seeking early-stage funding support," said John Haugen, vice president and general manager of 301 INC, in a statement announcing the investment fund.

Related: Crowd-funding Platform Connects Entrepreneurs With Consumer-Product Giants

In addition to cash, startup entrepreneurs that receive investment dollars from General Mills will get access to the braintrust of the supply chain, finance and marketing departments of the consumer products giant.

The General Mills-CircleUp partnership is not the first time a corporate giant has experimented with crowdfunding. Indeed, a couple of years back, Procter & Gamble also partnered with CircleUp, as did Johnson & Johnson. Meanwhile, office big box retailer Staples searched for innovative new products on crowdfunding platform Fundable.

The secret these companies are starting to catch onto is that crowdfunding isn't just about the money; it's a second-to-none way to conduct market research. Consumers only put their hard-earned pennies behind products and companies they are seriously into, providing lessons for brands of all sizes.

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

Editor's Pick

Related Topics

Business Culture

Why Recent Layoffs and Unaddressed Employee Grief Are Hurting Your Company's Bottom Line

Communication can go a long way in creating trust, stability and vision in an organization's very unstable time of grief. This will, in turn, improve the company's bottom line as well.

Business News

Opening a New McDonald's Franchise Will Be More Expensive in 2024

Starting January 1, franchise royalty fees will rise from 4% to 5% for new locations in the U.S. and Canada.

Business News

'An Absolute Prize': Rare Great Depression $10,000 Bill Sells For Nearly $500,000

The $10,000 bill is from 1934 and was never in circulation.

Business News

'Bar Tab Was Almost 80%': Restaurant Slams Well-Known Columnist After He Goes Viral For Claiming His Meal Cost $78

A photo of a burger and fries from 1911 Smokehouse BBQ at Newark Airport went viral for its alleged price, but the restaurant says the man didn't factor in his many alcoholic drinks.

Business Ideas

55 Small Business Ideas to Start in 2023

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2023.