Covid-19 introduced many challenges during 2020, not the least of which a drastic downturn in economic activity that has all but dried up most fundraising channels. However, out of this environment that is in shock, crowdfunding emerged as a successful alternative. Unlike its conventional counterparts, crowdfunding provides key advantages such as faster access to capital, a larger audience, and a more affordable process.
Having been estimated to reach USD 8.5BN in 2020, the latest data reveals that the 6,445,080 crowdfunding campaigns last year raised a total of USD 34BN. With diverse audiences from serious investors to inexperienced people supporting a community project, companies seeking funding need to leverage the appropriate platforms to reach those who want to invest in equity crowdfunding.
Equity Crowdfunding as an Investment
In contrast to general crowdfunding, equity crowdfunding offers participants a way to obtain equity in the business or venture. Instead of receiving a thank you or a physical product, investors in equity crowdfunding rounds get a share of the action, owning a portion of the company that they invest in.
Invest in an equity crowdfunding campaign and expect benefits like future dividends and capital appreciation. In other words, once a company is sold or goes public, investors get paid for their share. This means investors stand to gain if the company has grown in valuation.
A Unique Way to Invest
While there are other ways to acquire equity in companies, equity crowdfunding is unique in that investors can buy shares in very small increments – less than a hundred dollars, for example. And, while anyone can buy small amounts of stock market shares, equity crowdfunding allows individual investors to buy equity in startups and small companies that are a long way from listing on the stock market.
Risk and Return
Companies that list on equity crowdfunding platforms are often at a very early stage with no guarantee of successful growth. As a result, when you invest in equity crowdfunding, it is a high-risk investment that could potentially provide no return at all.
That said, if you choose wisely and invest in the best startups, you stand to gain significantly. In order to maximize your chances of a good return on equity crowdfunding, make sure you’re in touch with all the opportunities on the market. If you’re looking for the top equity crowdfunding investments, here are the most active equity crowdfunding platforms in the United States and Europe in 2021.
Equity Crowdfunding in the United States
Wefunder states that it is the largest portal for equity crowdfunding both by investment volume and total number of investors. To date, it has raised over USD 122M for Regulation Crowdfunding campaigns, USD 36M for Regulation D fundraising, and over USD 9M for Regulation A+ campaigns. These significant figures can be largely attributed to the broad range of startups it attracts, such as an online encyclopedia, a bionic pancreas, and a film production.
The platform accepts funds from international investors, with a flat 3.5% service fee, reduced to 2% if transfers are made using a credit card alternative. US-based startups can apply to join the platform, the charge is a flat 7.5% and only if funding succeeds, which covers all brokerage fees. Wefunder’s strength may well lie in its openness to startups of all colors – indeed, Wefunder is open to any company pursuing the American Dream.
StartEngine claims to be the largest equity crowdfunding platform in the market. With 190,040 individual investments made during 2020, the platform saw an increase of 241% from their 76 investments in 2019. StartEngine carries listings of every shape and size, with a wide range of environment-friendly startups plus plenty of tech companies and a couple of CBD companies too.
As an investor you won’t pay any fees to participate in a StartEngine listing, as companies listing on StartEngine are charged a fixed fee plus a dollar percentage of the capital raised – and an equity share. International investors can participate, but the platform only accepts listings from companies based in the US.
Accepting only 1% of the startups that apply to the platform, SeedInvest is an exclusive marketplace that raised a total of $5.1M in 2020. While the platform submits startups for intense vetting, investors can take part in the action with as little as $500 with 2% in fees. Capped to USD 300, fees are refunded if the listing does not reach its fundraising goal.
SeedInvest has listed a broad range of company’s looking for funding, from robotics through to food and beverage alongside a number of interesting healthcare startups. All listed companies are in the United States and SeedInvest accepts investments from outside the United States as long as local laws and requirements are met.
Republic, part of the Angel List family, was set up in 2016 in response to Title III of the JOBS Act, which enabled individual investors on average incomes to start investing in startups for the first time. The platform is geared towards everyday investors, with an investment minimum of just $10. Investors pay no fees when investing via Republic and the platform accepts investments from non-US citizens.
Despite only US-based companies being listed on Republic, investors will find an array of startups on Republic ranging from health and wellness to fintech – including cryptocurrency startups. Companies that raise funds on Republic pay a 6% charge on funds raised, only if the funding goal is reached while an optional 2% is charged if a company participate in Republic’s Crowd Safe program.
Both US-based and international investors can subscribe to deals on Crowdfunder, as long as they are accredited investors. This platform raised USD 5M in 2020, with 23 investors. If you’re tiring of food and beverage opportunities, you will like what’s on offer at Crowdfunder thanks to its many healthcare, tech and finance listings. There are no costs to investors, and only subscription fees to startups. Crowdfunder does not take part in the deal and doesn’t collect a fee for transactions.
While MicroVentures offers a broad choice of investment services, readers will be attracted to its range of equity crowdfunding opportunities – some with investment minimums as low as USD 100. Crowdfunding listings have an investor cost of 5% and investors can look forward to a broad range of funding rounds including robotics, healthcare and entertainment. Overall, MicroVentures says it has been responsible for over USD 220m in investments and hopefully, over time, more of these will be in the shape of equity crowdfunding.
Looking for unique opportunities in and around Texas? Be sure to check out NextSeed, listing a range of local businesses including hotels, restaurants and food vendors. This platform was acquired by Republic, yet continues to operate as a separate entity. Investors need just USD 100 to get started on NextSeed and the platform charges no fees – but only US-based investors can invest on NextSeed.
Companies that list on NextSeed pay 5% to 10% of the funds raised, with a small initial fee.
In a relatively novel twist to equity crowdfunding, Netcapital offers investors the opportunity to buy shares in unlisted, established companies from as little as USD 99. If you are interested in investing somewhere other than the latest, the trendy startups on Netcapital may be of real interest. Listings are concentrated around cutting-edge tech and healthcare businesses.
Netcapital investors pay no fees to invest, with all funds paid to Netcapital used to acquire shares. Companies listed on Netcapital pay a 4.9% fee. International investors can participate, though only US companies can list on Netcapital.
The legalization of cannibals across many US states opened up a range of business opportunities. Investors looking to cash in on the action should take a look at Fundanna, member of the TruCrowd family. In fact, Fundanna markets itself as the funding portal for hemp and cannabis enthusiasts. What’s more, investors pay no fees to invest in a Fundunna listing.
Fundanna-listed companies include cannabis growers, social media apps and real estate investments targeted at the cannabis industry. Companies pay Fundunna a once-off fee to list plus up to 12% on the investment proceeds.
If want to support a local business while enjoying a return on your investment Localstake might be just what you’re looking for. The US-based startups seeking funds on Localstake typically operate in food and beverage, real estate or energy and healthcare; all with a local focus. There are no fees charged to investors.
Localstake platform does not publish any restrictions on the location of investors, though it does appear as if it is only US-based companies that are listed as investment opportunities. Investors can also choose from revenue share loans, convertible debt and traditional loans in addition to an equity investment.
The world’s healthcare needs have evolved drastically. As the healthcare innovation required to meet these needs continues to grow, it stands to reason that investors want to be in on the action. US-based Bioverge offers a highly vetted list of healthcare startups across the US, covering everything from drug development through to medical devices and crowdsourced medical expertise.
Bioverge states that its Dynamic Diligence process makes use of a decision-analysis model to determine the risk-adjusted return of unique science startups. Companies listing on Bioverge are charged a one-off sum to cover setups fees plus 8% of funds raised which includes equity coverage courtesy of Crowd Safe.
Equity Crowdfunding in the UK
With 2020 being its most successful year to date, Seedrs raised GBP 239M last year alone. Starting your equity crowdfunding investment is particularly easy with Seedrs. The platform accepts investments from as little as GBP or EUR 10. You won’t pay any fees when you invest, instead Seedrs charges a flat 7.5% on any profits you make. Startups pay a 6% commission on funds raised and a completion fee. If you’re investing from outside the UK you will need to self-certify as an accredited investor as determined by your local jurisdiction, though everyday investors in the UK and EU can participate in Seedrs.
Investors have access to startups located across Europe, with investments denoted in both GBP and EUR. Every startup on Seedrs has a tech or novel edge to it, but they are sector agnostic. If you want to invest in equity crowdfunding, you can find anything from a premium drinks company to mobile banking and mental health apps.
Crowdcube announced last year their decision to merge with Seedrs to create one of the world’s largest private equity marketplaces. For years Crowdcube has dominated equity crowdfunding in the UK with one of the broadest range of startups listed. Ranging from technology outfits through to brewing companies and car clubs. Mostly for UK investors and startups, it accepts funds from international investors in some cases but may require additional documentation. Startups that are headquartered in Europe can apply for a listing on Crowdcube, with a minimum investment threshold of GBP 50,000 – though one startup, BrewDog, raised a phenomenal GBP 10m.
Smaller in size than Seedrs and Crowdcube, London-based Crowd for Angels still offers an interesting line-up of equity crowdfunding listings, including the opportunity to participate in bond offerings. Equity listings qualify for UK EIS tax relief, and investors pay no fees to Crowd for Angels. The platform accepts international investors, with the exception of investors in the United States.
On the flipside, companies seeking funds via Crowd for Angels pay a 7% success fee and a fixed completion fee. Startups that raised funds on Crowd for Angels include a Swiss watch brand, a content monetization platform as well as an outdoor web retailer and a Namibian oil explorer. All in all Crowd for Angels offers a very eclectic mix.
Having raised GBP 4,9M in 2020, GrowthFunders offers investors the chance to get started with as little as GBP 100. Registration is free and the platform does not list any fees for investors. Startups, on the other hand, pay 5.5% to cover fundraising fees and payment processing, plus a fixed fee to cover legal costs.
GrowthFunders does not publish any restrictions on the domicile of its investors, while it does appear as if opportunities listed on GrowthFunders are all located in the United Kingdom. Previous successful rounds include a workforce engagement platform and modular housing project – in tune with GrowthFunders’ stated intent to focus on social and environmental investment opportunities.
Equity Crowdfunding in the EU
Looking to invest in Germany’s cutting-edge startups? Companisto accepts investments from as little as EUR 1,000 and anyone of legal age can invest, no matter where they are in the world – with the exclusion of investors based in the US. Over EUR 70m has been invested in Companisto listings, with more than 100,000 investors participating.
Companies listed on Companisto are not visible to non-members, but successful investment rounds on Companisto have included a unique digital marketing solution, cutting-edge VR technology as well as a novel dental startup specializing in a patented orthodontic system.
Looking to invest in startups in Spain? Startupxplore may be your best bet, the platform claims it has raised over EUR 9.79M for 44 startups from 33,947 investors. It offers an interesting proposition for investors: 0% in initial brokerage fees, but the company charges 10% on any capital gains made through an investment, once sold.
Though startups on Startupxplore are concentrated around Spain, the platform lists opportunities from across Europe. Companies can register on the platform simply for the visibility – or to raise capital. Opportunities on Startupxplore include home food delivery, a cosmetics startup and a GPS sensor for seniors.
In contrast to many other equity crowdfunding platforms, WiSeed offers individual investors the opportunity to also invest in mature companies and SMEs, all based in France – alongside the ability to invest in startups. WiSeed says that the platform concentrates on environmental, healthcare and tech startups.
The investment minimum is EUR 100, with an initial 0.9% investment fee, with a further 5% in charges for equity investments. The platform also charges a 10% fee on any income distributed to investors. Though fees may appear high, Wiseed has raised EUR 261M from 19,000 investors.
Estonia’s digital-first approach to society makes it a natural home for an equity crowdfunding platform. Funderbeam lists a range of European startups with a strong focus on food products and companies that benefit society – think STEM education, and smart street benches. Investors are charged 5% plus a fixed once-off fee.
Investors in turn pay 3% where funding is successful. An interesting aspect of Funderbeam is that it also acts as a secondary market, adding an element of liquidity that is often lacking in equity crowdfunding. Anyone can invest in a Funderbeam listing with the exception of residents of the United States and a couple of other countries.
With press coverage in publications including Wired, the Guardian and TechCrunch plus over EUR 72M invested into companies, Sweden’s FundedByMe is clearly a serious player in the European equity crowdfunding space. At the time of writing FundedByMe had ten live investment opportunities ranging from food and beverage to furniture, travel and fashion with companies from all over Europe.
The minimum investment amount on FundedByMe is EUR 100. The platform does not appear to charge investors any fees. But companies listed on FundedByMe pay a listing fee and 8% of any amount successfully raised. FundedByMe accepts investments from international investors.
Whilst the Sowefund website is strictly French language-only, the platform impresses with the numbers quoted – EUR 45M raised, 50 startups financed, and 72,000 members. Sowefund lists an interesting mix of startups with a strong social and environmental undertone, think photovoltaic balloons and raw materials made from insects.
Sowefund charges investors 4.5% to 6% of funds invested, with an investment minimum of EUR 1,000. It doesn’t publish any restrictions on who can participate in a Sowefund listing, though the French language nature of Sowefund may prove to be an obstacle.
Finland / Sweden
With offices in Helsinki and Stockholm, Invesdor appears to make a good effort at covering startup investment opportunities in the Nordics. It has a track record of multi-million euro investment rounds across businesses as diverse as clothing, bicycle repair and a smart medical needle – mostly located in Northern Europe.
Fees for investors are reasonable at just 1%, only charged when an investment round is successful. Companies, on the other hand, are charged a variable fee likely to be in line with industry standards. Invesdor publishes no restrictions on investor status or location, but some restrictions may apply.
With offices in Amsterdam and Berlin, Leapfunder gives private investors the opportunity to invest in some of Europe’s most interesting startups – starting from as little as EUR 1,000. The platform does not state any restrictions around the domicile of investors, while startups listed on Leapfunder appear to be located in The Netherlands and nearby.
Run by CEO Tienko Rasker, Leapfunder has funded 118 rounds since 2014 with many startups receiving multi-million euro investments via the platform. Startups on Leapfunder are tech-first, covering areas such as AI-powered consumer advocacy through to digital VAT refunds.
Investors looking to participate in the sustainability movement should take a look at Green Rocket. Europe’s first equity crowdfunding platform for startups in energy, the environment and associated health and mobility issues. Successful rounds include companies across the healthcare, environment and energy sectors.
The Green Rocket website is German language only, but potential investors would be glad to know that the minimum investment is just EUR 250, while the platform does not charge fees to investors. However, you must reside in Germany or Austria to invest with Green Rocket. Companies listing on Green Rocket can expect to pay a maximum of 12% in fees plus an annual service fee of 1.5%.
Based in Rotterdam, Symbid gives private, individual investors the opportunity to invest in startups and growing businesses – via either an equity investment, or convertible bonds. So far, Symbid has raised EUR 33M from over 55,673 investors across 219 deals. With a low minimum investment of EUR 20 and just 1% in investment fees Symbid may be an attractive proposition.
Symbid does not aim to be a home for any specific type of business – instead, recent completed funding rounds include a smartphone app for music artists, a renewable energy project and a company producing seaweed food products.
Spain / United Kingdom
Headquartered in Barcelona with an office in Cambridge. Capital Cell is focused purely on crowdfunding companies that operate in the life sciences space. The platform says its unique vetting process puts it in prime position to select the best healthcare and biotech startups. Capital Cell’s niche angle does limit active investment opportunities, with four listed at the time of writing.
The Spanish-language website for Capital Cell contains more details on how the platform works. Minimum investment is just EUR 100 while investors do not pay any fees to invest in a Capital Cell startup. International investors can participate, but not if they are located in a country designated as a tax haven by the Spanish government. Companies listed on Capital Cell pay up to 7.5% of funds raised in fees.
Backed by Belgium’s KBC group, Bolero has EUR 22M in investment deals across 72 funding rounds under its belt. The website is only available in French or Dutch. But it clearly explains investment requirements – a minimum investment of EUR 5,000 and no fees for investors, though companies listed on Bolero pay 4.5%.
The platform lists a broad range of investment options. From a bicycle factory based in Belgium through to property and finance investments. You’ll also find fintech startups alongside the typical crowdfunded food and beverage businesses on Bolero.
Claiming an average return of 15% p.a., Seedmatch promises investors a unique opportunity to get a stake in German startups. So far, the platform has raised EUR 57m and investors can get on board with as little as EUR 250. Investors are not charged any fees for investing with Seedmatch.
Companies listing on Seedmatch pay 5% to 10% in fees on funds raised, but only if the investment round is successful. Listings cover the startup remit, from mobility through to healthcare and food and beverage. There are no restrictions on who can invest, Seedmatch just requires that you’re over 18.
Investors can choose from a range of innovative startups of all shades. Most companies on Happy Capital are clustered around Paris. There is a substantial number of startups to choose from – it is a very active platform.
The investor fee on Happy Capital is 3%+VAT, with investment opportunities starting from just EUR 100. Companies, in turn, pay between 6% and 8% of the total amount raised on the platform. Note that investments must be kept for a minimum of five years.
Equity Crowdfunding in Israel
ExitValley has raised over USD 30m across more than 69 campaigns, with an eclectic range of startups under its roof. Investors have funded biotech outfits, an on-demand shopping platform as well as an art gallery. Note however that unlike other equity crowdfunding platforms, minimum investments on ExitValley are relatively high. In the range of several thousand dollars, at least.
Anyone in Israel or the EU can invest, and ExitValley accepts investments from accredited US investors. Investors are charged a 5% sales commission when shares are sold. While companies listing on ExitValley pay an establishment fee of USD 3,500 plus 10% of the funds raised, if successful.
Looking to get in on the action in the Israeli startup scene? Together offers a unique proposition, with a range of startups based in Israel – all open for investment. Healthcare and property investments appear to be the overriding theme, with several active funding rounds at the time of writing.
Together does not specify what the fees for investors are only stating that companies listing on the platform will pay a commission on funds successfully raised. Minimum investment thresholds are relatively high on some listings – up to USD 20,000 in one instance.