When it comes to entrepreneurship, innovation is paramount. But despite the high demand for innovative ideas and inventions, entrepreneurs find themselves at a loss due to capital constraints that prevent them from turning their brilliant idea into reality.
Entrepreneurs, budding leaders, inventors, business owners, and other creators need to raise capital to make their vision into reality. Investment crowdfunding is a game-changing financing option that helps make that happen.
Gone are the days when you could only rely on established institutions like banks when strapped for cash. Whether you need to jumpstart your new venture as a key player in your niche or need aid from your community to fund a cause, crowdfunding is a versatile funding option.
As part of the evolving law changes surrounding investment crowdfunding, regulatory bodies like FINRA and the SEC grant special licenses to crowdfunding platforms. These platforms, serving as registered broker-dealers or funding portals, are responsible for protecting investors from poorly performing or fraudulent companies that want to raise money via investment crowdfunding. Such platforms also serve as the “shopping hub” for potential investment opportunities, listing available investment crowdfunding opportunities directly on their websites.
If you’re wondering which one is the right one for your company’s needs, we’re here to narrow your options by putting the spotlight on some of the most popular crowdfunding platforms.
1. Republic.co: a Crowdfunding Site for Everyone
Pricing: 6% platform fee + 2% equity fee for companies if they reach their funding goal
Renowned as a top crowdfunding site, Republic.co has built strong credibility since its launch in 2016. Republic.co has gained a reputation for being one of the most popular platforms thanks to its impressively high flow of funds available in any situation, making it easy and quick when you need money fast!
While businesses turn to Republic to supercharge their funding goals, the platform lends itself as a valuable tool for investors as well - allowing anybody to own equity in a startup. Be it an ingenious brand such as EquipmentShare, which raised a significant amount through private raises to provide contactless construction solutions, or one of the most popular online real estate startup SimpleShowing that raised over $1 million through two campaigns, Republic.co provides a great experience for all parties involved.
They do not charge investors, and one can begin investing in companies even with a credit card, as long as they are above the age of 18. Additionally, one can start investing with Republic.co with a minimum of $25.
2. StartEngine: a Crowdfunding Site for Innovators
Pricing: 7% platform fee + 2% equity fee for those who meet their goals along with other set-up charges
Another contender for being one of the most credible, recognizable, and trustworthy investment crowdfunding sites is StartEngine, which puts several unique projects into action. The simplicity of Republic.co makes it one of the most recognizable platforms in the community. Still, budding founders, seasoned entrepreneurs, and inventors often rely on StartEngine for raising enough starter capital to pave the way for their products in the marketplace.
StartEngine has already helped over 300 companies successfully raise over $175M from a community of 250,000 crowdfunding investors. These include companies like Digital Brands Group (DGB), ChoreRelief, and many more that have succeeded in raising the required funds in a given amount of time.
With no deadlines and a minimum funding target of at least $10,000, StartEngine is perfect for businesses that need more flexible funding. The platform also offers securities, crowdfunding equity, revenue sharing, or even tap into cryptocurrency sales. This differentiation allows for a myriad of funding/investment options that lend themselves to different types of companies.
With over 100,000 investors and about 48% making repeat investments, StartupEngine is quickly gaining traction within the startup and investor communities. In 2019, StartEngine reported a 67% increase in the total amount invested to $43.7 million, and the average investment per company spiked by 4x.
3. Vicinity Capital: a Crowdfunding Site for Builders and Tech-Focused Projects
Pricing: 5-15% platform fee along with an equity fee, depending on the campaign plans
With a mission to “Connect Local Capital With Local Businesses,” Vicinity Capital focuses on builders and makers in your neighborhood so that you can invest both on and off the main street.
Vicinity Capital is a crowdfunding platform designed for local designers and manufacturers but uses a different model than other websites by offering extra services like mentorship with veteran developers. Investors can start with as little as $100 with Vicinity Capital’s funding portal to finance their community.
The thought is, local businesses are the backbone of the economy. As communities become more interconnected, they are more self-reliant, resilient, and healthy. Vicinity believes in the economic "multiplier effect": a dollar spent at a locally-owned business will generate ~3x the direct economic impact over the same dollar spent at a corporate-owned peer.
4. Netcapital: a Crowdfunding Site for Personal Use and Charities
Pricing: Success Fee of 4.9% of the amount raised
Netcapital proves that technology and a strong sense of community bring people together, offering financial opportunities to individuals. They believe in funding innovation and provide people access to new investment opportunities.
Whether it’s to support public-spirited causes, medical needs, or even personal projects, Netcapital believes in taking leaps of faith in ideas and people making a positive impact within their respective industries.
Netcapital is an investor-friendly company with a speedy checkout process and quick account creation. They are committed to making the process of investing as easy and hassle-free for their customers.
Compared to other crowdfunding platforms, Netcapital has a personalized approach. The former CEO of Techstars addressed Netcapital as “A paradigm shift in the capital market dynamics.” One of the most recent funding projects was for a B2B SaaS company called ChipBrain that successfully raised $716,664 on the platform.
Several companies like GenesisAI, EnergyX, and Bioverge have successfully raised through Netcapital in the year 2021. They believe in making private transactions transparent and easy while providing every innovator access to funds!
5. Wefunder: a Crowdfunding Site for Businesses from Multiple Industries
Pricing: 7.5% platform fee
Small business owners who need to raise enough capital to propel their venture forward can turn to Wefunder. This crowdfunding platform helps different niches solidify their foothold in their respective industries.
Wefunder aims to break barriers and transform capitalism into an opportunity to invest in startups the community believes in. The platform focuses on various businesses, including brick-and-mortar restaurants, breweries, tech software startups, and other service-based businesses. For example, Modern Times, Ola Brew Co, and LPP Fusion are some of the startups that had great success raising through Wefunder!
Wefunder is a good option for any business that wants to grow and become successful. It has many services available such as mentorships, investor relations support, and legal documentation assistance. This makes the platform ideal for those looking to grow beyond what other sites can offer through equity-based funding.
Since 2012, they’ve helped fund over $250M for thousands of founders (about half of which was in the last year due to its increasing popularity). They believe more long-term wealth will be generated for investors – and more wealth shared more fairly – if the focus is on businesses’ impact and people are treated fairly.
6. SeedInvest: a Crowdfunding Site for Early-Stage Companies
Pricing: 7.5% platform fee along with 5% equity fee
Startups can also rely on SeedInvest to get started with their investment crowdfunding journey. This crowdfunding platform aims to enhance the economy by supporting high-growth, early-stage companies.
SeedInvest presents itself as an equity-based crowdfunding site, but it takes its funding process to the next level as it connects startups to relevant ventureS capital firms or angel investors looking to help businesses get off the ground. With over 500 startups funded since 2012, SeedInvest is a reliable platform for ventures who want to reach out to investors from all walks of life.
Some of the major companies that raised capital through SeedInvest are Blokable, Death & Co, and NowRx Pharmacy. The platform has a wide variety of industries in its portfolio and has an excellent success rate as well.
The competitive rate, auto-investing features, and diverse investment opportunities for non-accredited or accredited investors make this one of the best platforms for businesses ready to step out and make it big in the industry.
Investment Crowdfunding is a powerful way for entrepreneurs and investors to get involved in early-stage companies. Crowdsourced investments offer much more than just money; they also provide valuable feedback, network-building opportunities with investors in the project as well as potential customers/users before launch.
These campaigns are not solely about funding; they also help raise brand awareness and engage net-new users. Investment crowdfunding is one of the most accessible and efficient ways for entrepreneurs to get their ideas out into the world. Startups can use investment crowdfunding not only to expand their network but also to create a buzz to secure early adopters.
The digital era creates an open path where nearly anyone can raise funds to support their business idea, nonprofit cause, or unique inventions. It’s important to choose the right platform that can provide for your needs with suitable pricing options, timelines, and market support.
With that in mind, you can easily navigate your choices and narrow them down to the best of the bunch by focusing on crowdfunding sites with a proven success rate for campaigns. It’s also critical to pick a crowdfunding platform that specializes in your type of business, so it can support your unique project and connect you to the ideal investors/community that understand your business needs.
Chasing after your dreams as an aspiring entrepreneur is undoubtedly exciting, but it takes more than determination and a leap of faith to reach your goals. Every startup needs enough funding to bring novel ideas to fruition but finding the right support can be tricky.
In just six weeks, Beanie & Blazer’s Test The Waters program can help you prepare and launch a trial investment crowdfunding campaign. We leverage the best practices from dozens of successful investment crowdfunding efforts and hundreds of investor discovery calls to help creators build investable companies.
Consider subscribing to our newsletter to stay up-to-date on investment crowdfunding, creator mindset and cooperative capitalism.
Beanie & Blazer does not provide investment advice and is not a registered investment advisor or broker-dealer. Investing in startups is risky, never invest more than you’re willing to lose.
To read the full disclaimer, click here (https://beanieandblazer.com/disclaimer/)