Equity crowdfunding is a hot trend in startup financing. It’s a win-win for both investors and founders. Platforms like the ones we’re about to discuss allow investors who are willing to take a risk to get in on equity offerings. If the company does well, these could significantly increase in value over time, especially if the company goes public. These platforms also give entrepreneurs who need capital a chance to get it when banks, private equity firms, and some venture capitalists might be hesitant to invest.
However, not all equity crowdfunding platforms are created equal. The best ones offer a variety of deal structures and have investment minimums that are affordable for the average investor.
Here are some of the top crowdfunding platforms for U.S. investors and startups. They all take advantage of the JOBS Act and Regulations A and A+, which have modernized and democratized small-scale private equity investing in the U.S.
While all platforms accept accredited investors, only some accept non-accredited investors. It’s not always clear which is which, and a platform’s investor requirements can change. If you’re considering investing, you should contact the platform to find out its current policy.
To register with any of these platforms and participate in funding rounds, investors need to provide their identity, income, and asset verification. Unless otherwise noted, these platforms don’t charge fees to register or maintain membership as an investor.
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AngelList: Founded in 2010, AngelList is one of the oldest and most established equity crowdfunding platforms. It was originally designed to connect tech entrepreneurs in need of cash with angel investors. Today, there are three main ways to invest on this platform: Deal-by-Deal Investments (Syndicates), AngelList Venture Funds, and Rolling Funds.
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Microventures: Microventures is a full-service investment bank with a strong equity crowdfunding arm that caters to both non-accredited and accredited investors. It offers a wide range of industries with a focus on consumer-facing opportunities and high-growth niches like cannabis and biotechnology.
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Fundable: Fundable provides hands-on help with profile building, pitch construction, and even business plan development for companies interested in equity crowdfunding. It’s now part of startups.co, which includes virtual assistant platform Zirtual.
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StartEngine: StartEngine offers a mix of investment opportunities in both consumer- and business-facing startups. Industries like robotics, space exploration, and renewable energy are heavily represented here, but you’ll also find opportunities in areas like craft beverages and home automation.
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EquityNet: Founded in 2005, EquityNet claims to be the “original equity crowdfunding site” and says it holds the only patent for the concept. It features a mix of consumer products and social enterprises, as well as single-asset projects like assisted-living facilities and medical clinics.
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Wefunder: Wefunder’s co-founders were heavily involved in the debate over the JOBS Act and claim some credit for the crowdfunding-friendly measures that made it into the final legislation. It offers a range of funds and individual startups in various sectors.
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SeedInvest: SeedInvest is a more formal platform that specializes in “highly vetted investment opportunities.” It claims to accept just 1% of applicant companies. Most of the listed companies are individual technology startups, although there are some options from other sectors, as well as a handful of multi-company funds.
The equity crowdfunding landscape is always changing due to regulatory uncertainty and the volatile nature of the early-stage startup ecosystem. Platforms come and go, and before launching or investing in a new offering, investors and founders should do their due diligence on a range of available platforms to ensure they choose a stable vendor that meets their needs. As in other aspects of business, relationships between investors and founders are stronger when they’re based on mutual trust and shared goals.
