Equity Crowdfunding

Equity Crowdfunding [Top Sites 2021]

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Equity Crowdfunding Sites

Equity Crowdfunding – Top Sites

When it comes to starting a business, one of the biggest challenges you’ll face is financing it. In fact, most entrepreneurs and small business owners say that raising money is the most difficult thing they have to do. Fortunately, when it comes to raising capital to get a business off the ground, there are more choices out there these days than ever before.

One of the newer and most innovative forms of business financing out there is equity crowdfunding. Equity crowdfunding allows large groups of investors to pool their capital together and invest in startups they believe are worthwhile, usually for a share of ownership and a share of future profits.

Top Crowdfunding Platforms

Biggest Equity Crowdfunding Platforms 

Crowdfunding is not an internet fad. Companies are using this innovative financing method to raise significant amounts of cash to fund their business ventures. In fact, in just a few short years companies have raised over $34 billion globally on crowdfunding platforms. There are hundreds of equity crowdfunding platforms now active around the world. The three largest ones currently operating are Fundrise, an American real estate-focused platform that has raised over $55 million; the UK-based Seedrs, which has raised $31.8 million; and AngelList, which has raised over $26.2 million. 

Nonetheless, in some countries, there are several restrictions placed on crowdfunding. These restrictions range from who can apply for equity crowdfunding to who can invest in a startup in the first place. These restrictions are made to cover persons who earn less and are at huge risk of loss at the end, similar to hedge funds restrictions.

Crowdfunding has invariably reduced the gap on venture capitalists when seeking companies to grant equity. Equity crowdfunding creates a platform for investors to invest millions of dollars from anywhere in the world. Equity crowdfunding also provides a meeting point for entrepreneurs and startups to pitch their business ideas with convenience. 

What is proven is that if an entrepreneur has the best ideas with the best pitches, he is sure to get over 5% of his projected investment from crowdfunding. This advantage offers the startup enough capital to undertake the business.

There are several great equity crowdfunding sites out there that can help your company secure the financing it needs to start and grow. Additionally, if you’re a prospective investor, these sites are a great place to find the next big thing. Here are some equity crowdfunding sites you should check out from the US and beyond.

EQUITY CROWDFUNDING USA

Fundable

Fundable

Fundable is a US-based equity crowdfunding platform for businesses seeking to raise capital in exchange for either equity, debt, or rewards. To raise money for your startup on Fundable you must have a US bank account, address, and social security number (SSN) or business tax ID number. Fundable can even help you create a US C-corp via their Global Plans which will give you a US entity and the ability to raise funds on the Fundable platform if you live outside of the United States. Contact them at [email protected]

Funding Types

Fundable campaigns are all or nothing and are dependent on what you and the investor agree upon. Fundable is not part of the negotiation process and all transactions occur offline and away from the Fundable platform. Traditional equity can be offered, as well as convertible and non-convertible debt.

How It Works

After creating your profile and uploading your Business Plan Profile, investors will show interest by requesting access to your Business Plan Profile. Everything else takes place AWAY from the Fundable platform so you need to communicate, negotiate, create term sheets and legal documents, and organize the transaction of capital on your own. This can be seen as both a pro and con, depending on what type of raise you are looking to conduct. For Debt and Equity raises, the minimum commitment is $1,000.

Fees & Pricing

It is free to create your company profile to share with your crowd before your fundraiser launch. This free feature gives you time to build your following and grow your crowd by inviting friends, family, and customers to visit your page and create a buzz, as well as receive any feedback.

$179 Monthly Fee

Fundable charges $179 per month for you to create and manage your fundraiser on their platform. All the money your raise is yours, they don’t take a fee of any capital raised.

Merchant Fees for Rewards Campaigns

Fundable uses WePay to charge backer credit cards during rewards-based raises. The merchant processing fee is 3.5% + 30c per transaction.

Raise Equity on Fundable

Head to the Fundable website to get started:

Wefunder

WeFunder

If you’re a new or smaller scale investor who is new to equity crowdfunding, WeFunder may be a great option for you. This equity crowdfunding site does not require the investor accreditation that many other platforms do, so it is much easier for smaller-scale investors to participate in. In fact, WeFunder has since become one of the most popular equity crowdfunding platforms for non-accredited investors.

Funding Types

WeFunder is an all-or-nothing direct investment equity crowdfunding site. Companies that do not obtain the pledges to meet their investment targets do not get funded. 

How It Works

When you choose to invest in one of the companies that use WeFunder, your funds are transferred and held in escrow at Boston Private Bank; WeFunder does not touch or otherwise do anything with your money. If the company in question is successful in raising funds, your money is released to them.  

Fees & Pricing

The site charge a flat 7% fee for any successfully completed fundraising.

Raise Equity On WeFunder

Get started today:

CircleUp

CircleUp

If you want to invest in established companies focused on consumer products, CircleUp is worth considering. This equity crowdfunding site focuses investors on companies that already have $1 million or more in revenue, and have “tangible” products, not software or apps. This equity crowdfunding site is underpinned by a powerful machine learning engine called Hello, which can help investors zero in on the exact types of deals they are searching for. 

Funding Types

Investors typically receive stock in the company or companies they choose to invest in. That stock entitles them to future dividends or proceeds from any sale if the company is later sold. Additionally, CircleUp also runs its own closed marketplace index funds as well. Finally, CircleUp offers working capital loans to qualified companies at competitive rates. 

How It Works

The companies in question set the minimum investments required, which in some cases can be as low as $250.00. Accredited investors can then choose whether or not to invest in them. 

Fees & Pricing

CircleUp typically charges companies raising funds a 5% fee after each successful round of fundraising.

Raise Equity on CircleUp

Find out if you’re eligible to raise equity on CircleUp:

LocalStake

Localstake

If you’d like to find a good business with great potential in your area to invest in, check out Localstake. This equity crowdfunding platform focuses primarily on consumer-facing businesses, such as stores or restaurants. There are no investor fees on this platform; either, another benefit of Localstake. 

Funding Types

Investors using Localstake can choose to invest via traditional and revenue-share loans, convertible loans, and preferred equity. Some, though not all, of the investment opportunities, are open to unaccredited investors as well, and individual investments can be as low as $250.

How It Works

Localstake assists the companies in question to analyze the best investment path to take, build an offering, create a network of interested investors, and navigate the complex regulatory environment. If you’re looking for a hands-on partner to guide you through the equity investment process, Localstake is a good choice. 

Fees & Pricing

Localstake charges a $499 monthly subscription fee to companies while they’re preparing to fundraise and actively fundraising; there is an additional  $1000 preparation fee for preparing the funding offer as well. The equity crowdfunding site also charges a success fee upon the company’s receipt of funding. This fee can be either a flat rate or up to 5% of the funds raised, depending on the company’s situation. 

Raise Equity on Localstake

Determine whether or not your company is a good fit for the Localstake equity crowdfunding platform:

Nextseed

Nextseed

Not all crowdfunding sites require entrepreneurs to provide equity, or ownership, in the companies they are being asked to finance. The innovative crowdfunding platform Nextseed, for example, provides debt primarily to companies in the restaurant, retail, and consumer market sectors. 

Funding Types

Nextseed offers a variety of debt opportunities, including traditional loans and revenue sharing models, where the company begins paying a predetermined level of revenue back to the investor at an agreed date, or when certain conditions are met. 

How It Works

Nextseed maintains a set of highly curated companies that investors can browse through; if an investor chooses to invest in one of the companies, he or she can do so via their next seed account. Nextseed also processes all of the payments back to investors’ accounts as well. 

Fees & Pricing

Nextseed typically charges the borrowing company a 10% fee on the capital raised, and an additional 1% fee on any payments the borrowing company makes. 

Raise Debt on Nextseed

You can pre-qualify for the Nextseed application process here:

SeedInvest

SeedInvest

Most equity crowdfunding sites are only open to accredited investors, who must earn $200,000 or more over the last two years, or have a net worth of $1 million. SeedInvest, however, takes advantage of new equity crowdfunding rules put in place several years and allows smaller-scale investors to participate.

Funding Types

There are multiple investment opportunities for companies listed on SeedInvest, including  Reg D, Reg A+, and Reg CF investments

How It Works

According to SeedInvest, only 1 percent of startups pass their intensive vetting process and are approved to use the site for investment. Once there, investors can browse these companies and select ones they believe have potential. Since the minimum investment threshold is only $500, investors can diversify by investing small amounts in multiple companies. 

Fees & Pricing

SeedInvest charges investors a 2% processing fee on any investments they make on the site, with a $300 processing fee. However, if the finding threshold isn’t met, this fee is refunded. Companies seeking to raise equity on the site pay a 7.5% placement fee upon receipt of funding, along with 5% warrant coverage and various other fees which can total up to $10,000. 

Raise Equity on SeedInvest

You can apply to raise equity on SeedInvest here:

MicroVentures

MicroVentures

The aptly-named MicroVentures is another equity crowdfunding site that is open to small-scale unaccredited investors. It also focuses on small companies in the tech, green, social, media, and gaming sectors that need anywhere from $150,000-$1 million in capital. 

Funding Types

MicroVentures offers Regulation D Rule 506 and Regulation Crowdfunding.

How It Works

MicroVentures curates a small group of high-quality companies. Prospective investors can browse through them and select companies they wish to invest in. Investment minimums vary on the site, but some are as low as $100. 

Fees & Pricing

MicroVentures charges companies that are raising equity a  $99 application fee and a $250 due diligence fee. Additionally, the platform charges borrowers and investors each a five percent fee on the equity that is successfully raised as well.

Raise Equity on MicroVentures

You can sign up to raise capital on MicroVentures here:

Republic

Republic 

Republic is a relatively young equity crowdfunding platform, having launched in 2016. However, it has since become one of the fastest-growing equity crowdfunding platforms in the country. It is another equity crowdfunding site that allows smaller scale, unaccredited investors to participate. 

Funding Types

The platform enables equity crowdfunding, with some investment thresholds as low as $10. 

How it works

Republic is another site that brings in plenty of small-scale investors. These investors can invest a small amount in one or more companies, which allows them to diversity. Then, based on the investment criteria, they can earn a return if the company succeeds. 

Fees & Pricing

There are no investor fees on Republic. Companies receiving equity investment are charged a 6% fee for the amount of capital raised, as well as a 2% fee for any securities sold.

Raise Equity on Republic

You can register to use the Republic platform here:

FundersClub

FundersClub

FundersClub is one of the older equity crowdfunding sites out there. The San Francisco-based platform was started in 2012.  FundersClub focuses primarily on high-quality technology-related companies and offers an excellent vehicle for investors to back teams delivering new and innovative products and services to the market. 

Funding Types

The tech-oriented FundersClub allows investors to either invest in a single company, much like many other equity crowdfunding platforms, or to invest in several companies at once through a multi-company fund. These multi-company funds typically invest within a particular technology sector or a top startup accelerator batch

How It Works

Accredited investors can sign up for a FundersClub account, access information on the vetted companies listed within the platform, and either choose to invest in them or through one of the aforementioned multi-company funds. 

Fees & Pricing

Companies raising equity are charged a fee upon a successful raise that can vary widely. Additionally, the company charges management fees on the multi-company funds that range from .5-2%.

Raise Equity on FundersClub

You can apply to raise equity on FundersClub here:

Equity Crowdfunding Australia 

Pitchblak

Pitchblak

If you’re an entrepreneur in Australia who needs pre-seed or seed funding, Pitchblak could be a god equity crowdfunding platform for you. Pitchblak’s management team all have backgrounds as entrepreneurs themselves, so they can be an effective resource for young creators with great ideas who need advice and financing to get their startups off the ground. 

Funding Types

Pitchblak gets pre-seed and seed funding of up to $1.5 million for small startups. 

How It Works

This equity crowdfunding platform, specializing in young startups, takes a much more hands-on approach to support the companies it works with. Pitchblak’s team helps entrepreneurs develop strategies for marketing, company development, and financing, and gets a startup from the idea stage to successful funding. 

Fees & Pricing

According to the company, Pitchblak’s pricing is bespoke and is catered to the exact requirements and circumstances of each specific client.

Raise Equity on Pitchblak

If you’d like to work with the Pitchblak team, apply here:

Billfolda

Billfolda 

Billfolda is an equity crowdfunding platform that focuses on companies across a wide variety of industries, from internet gaming to medical devices and industrial tech, and connects them to investors who recognize their potential. The company prides itself on the low fees it charges in facilitating this process. 

Funding Types

Billfolda facilitates equity investments in single companies and allows small scale investors to invest as little as $250 in them. 

How It Works

Billfolda typically follows a “lead investor” approach and works with companies that have already been vetted and invested in b another angel investor, or series of investors. Billfolda helps the team of entrepreneurs prepare the new offer shepherding them through the entire process. Then, investors can use the platform to select and invest in the company. 

Fees & Pricing

Billfolda charges companies raising equity a percentage fee that varies from issuer to issuer based on the work required and the circumstances of the company. It also charges the company for any out-of-pocket expenses with no markup as well. 

Raise Equity on Billfolda

Find out if Billfolda is a good fit here:

OnMarket

OnMarket 

OnMarket is an equity crowdfunding platform that focuses on obtaining funding for disruptive Australian companies. While it extensively vets the companies featured on the platform, it is less picky about the stage they are in; investors on OnMarket have the option to find and invest in companies from seed stage all the way through initial public offering (IPO). 

Funding Types

Investors can select companies to invest in for as little as $250 on the OnMarket platform. 

How It Works

Investors can apply for an investment opportunity on the site by selecting an investment profile to review. After reading all the documents, you have to accept the terms and conditions for a particular investment. Once you do, you input the amount you want to invest and then click submit. Start the application process by creating or selecting an investment profile to apply for this offer.

Fees & Pricing

OnMarket charges a 7.5% fee on funds raised via the OnMarket platform and charges the companies it works with a $10,000 assessment/establishment fee.

Raise Equity on OnMarket

Find out if OnMarket is a good fit here:

Birchal

Birchal

Birchal is an Australian equity crowdfunding site that helps Australians invest in the brands they love. It is heavily focused on companies that develop consumer products with potential. The platform allows people to invest as little as $50 in a company, which helps to maximize the number of investors that can participate in a single equity raise. 

Funding Types

Birchal works with companies in a wide range of development stages, from seed stage companies who have yet to bring a product to market to brands that are already established. 

How It Works

Companies interested in raising funds create an expression of interest (EOI) on the platform. Investors can apply for shares at that point, pay for them, and if the equity raise is successful, shares will be issued to all of the investors. If the equity raise doesn’t succeed, all funds are returned. 

Fees & Pricing

Birchal charges companies raising equity a 6% success fee if they raise their funds in a campaign. The platform also charges fixed fees for an EOI and crowdfunding campaigns of $900 and $1,900, respectively. 

Raise Equity on Birchal

If you’re an Australian company and want to give equity crowdfunding a try, head to Birchal:

EnableFunding

EnableFunding

EnableFunding is another Australian equity crowdfunding platform focused on disruptive Australian companies. It is designed for “sophisticated investors” with a net worth of at least $2.5 million, or a gross income of $250,000 or more for two years. 

Funding Types

This platform allows investors to back a wide range of highly curated Australian companies that are assessed to have significant growth potential. 

How It Works

You can register for free on the platform as an accredited investor. Then, once registered, you can access EnableFunding’s curated selection of investment opportunities. You can apply online when you’re ready to invest.

Fees & Pricing

Success fees vary from company to company and are distributed across multiple stages to reduce the cost burden on the company. Additionally, there is a mandatory training session participating companies must participate in which costs $2,500. 

Raise Equity on EnableFunding

Apply to raise capital on EnableFunding:

Equity Crowdfunding Pros and Cons

Crowdfunding has rightfully become popular over the past decade or so, especially with small, fast-growing startups and tech companies.  However, there are shortfalls and challenges with crowdfunding that everyone should be aware of. Here are some of the key pros and cons of equity crowdfunding. 

PROS

  • Innovative ways to interact with clients: Equity Crowdfunding offers you the opportunity to bond with clients that are essential to your business. These clients leave feedback on the performance of your company and usually are the first investors to your business. 
  • Access to significant funding resources: Let’s face it, the equity crowdfunding route opens your business idea to wide access of funds that you can use to get to launch stage, or to take your company to the next level. .
  • Access Funds you might not ordinarily be entitled to: This is perhaps the biggest advantage of equity crowdfunding. Since all that’s needed is a good pitch and a sellable idea, investors are often more interested in the concept and the entrepreneur’s ability to pitch it, and, unlike a lender, may not pay as close attention to the person’s credit rating or balance sheets. 
  • Ability to weigh Public Opinion: Feedback from the public is vital to the overall growth of the company. The better the feedback the more interested investors would be willing to make investments in the company. Equity crowdfunding platforms allow entrepreneurs to get a first-hand experience of their clients’ views on their idea and give them opportunities to further hone their pitch as well.

CONS

  • Failure to reach funding goals can cause a retraction of investments already placed: If investors fail to reach the intended funding goal placed on the equity crowdfunding platform, the entrepreneur in some cases would be required to refund all the sums funded by the investors.
  • Fees and rules on platforms: Most equity crowdfunding platforms offer a ton of rules and fees, some of them quite high, for investors and entrepreneurs who use them. In some cases, especially for smaller companies just starting out, these costs can be a heavy cost to bear.

Parting Thoughts: Get to Know Crowdfunding 

Whether you’re an investor, a startup, or an established company, equity crowdfunding sites can provide you an opportunity to pursue your business objectives. Each of the platforms discussed here has its own unique benefits, as well as some drawbacks. Before you choose an equity crowdfunding site to invest your money or get your business off the ground, make sure you do some research, and select the platform that can best meet your needs. 

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Top Equity Crowdfunding Sites

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