With the Crowdfunding industry projected to account for more funding than Venture Capital money deployed in 2016, entrepreneurs as well as investors are looking at different ways to “cash in” with crowdfunding. The JOBS Act, Jump-Start Our Business StartUps, was passed and signed into law in 2012 by President Obama allowing startups to crowdfund online and sell equity in their startups to accredited investors – those with an annual income exceeding $200,000 or a net worth of at least $1million. In October 2015, President Obama signed into law, Title 3 of the JOBS Act which allows anyone with an income lower than $100,000, to invest and buy equity in crowdfunded startups totaling up to $2,000 within a 12 month period. These rules now allow virtually anyone to buy equity in startups they believe in, and hopefully benefit from a future acquisition or IPO of the company. With that, many companies have positioned themselves and built crowdfunding platforms that will allow for the sale of equity. Below we take a look at a few of these. And it’s up to you to decide which platform may be best for you, as an entrepreneur fundraising for a project or, as an investor looking to find great projects to invest in.
Seedinvest is an equity crowdfunding platform that connects startups with investors online. The founders Ryan Feit and James Han were instrumental consultants to the Securities and Exchange Commission as well as Congress during the passage of the JOBS Act. Seedinvest has over 15,000 accredited investors and does not charge investors fees or carried interest. All of the startups on the platform are highly vetted to ensure the best possible outcome for both startups and investors.
Fundable touts itself as a platform that allows small businesses to crowdfund. It is a unique platform that allows for both reward based crowdfunding as well as the ability to do equity crowdfunding. As of January 2016 Fundable cites that over $221 Million has been invested into companies through the platform. Fundable charges companies anywhere from $99-$299 to host their project. Fundable is part of the Startups.co family which offers a suite of online products that help entrepreneurs to succeed. Fundable acquired Launchrock, an easy to use landing page creator that allows you to acquire leads and email addresses before your campaign launches.
Crowdfunder packages start from $99 and move up to $999, with the latter being for startups looking to raise the Series A through the platform. Crowdfunder has over 7,000 startups that have listed their campaigns on the service. Crowdfunder offers Syndicates, which allows individual investors to invest their money into a larger investment entity on the platform which will then, in turn, invest their money for them into the companies.
EquityNet lauds itself as the largest business crowdfunding platform and has been around since 2005. Since then over 8,400 companies have signed up on the platform seeking over $2.5 Billion in funding. In the last 12 months alone, $115 Million has been raised by entrepreneurs through the platform.
Indiegogo is one of the largest and most popular donation based crowdfunding platforms in the world. After the passage of the JOBS Act, Indiegogo stated that they will be offering the ability for equity based fundraising in the future. In the mind of most crowdfunding entrepreneurs and supporters, Indiegogo, is already known for it’s easy to use platform and great customer service. The inclusion of equity crowdfunding will only help the company flourish even more. This is a big win for the platform as it’s main competitor, Kickstarter, said they would not be offering equity crowdfunding on their platform.