In 2016, just over 6% of job seekers in the US decided to start their own business.
More entrepreneurs leaped into entrepreneurship that year than they have since 2009. But starting your business can be tough - especially when it comes to finding funding.
Whether you're considering starting your own business or you've already gotten started, equity crowdfunding is now an option for financing your business. And if you're unsure where to start, you may want to take a look at the top crowdfunding sites out there.
Keep reading to learn more about the top 8 equity crowdfunding sites and how they can help you.
8 Top Crowdfunding Sites for Equity Crowdfunding
Equity crowdfunding sites are similar to traditional crowdfunding platforms you've likely heard of (aka Kickstarter or GoFundMe). There's one key difference though: an equity crowdfunding sites are for entrepreneurs looking for ways to finance their startup. It involves an investment arrangement wherein the new company issues equity to the investors on a proportional basis.
There are several equity crowdfunding sites out there, but we've gathered the top 8. Learn more about each of these below.
Fundable is a bit different than the other sites we've listed here in that they do. They offer both equity crowdfunding as well as reward crowdfunding campaigns similar to Kickstarter. They're best for companies that need to raise substantial sums of capital, and they allow you to choose your campaign and a subscription package.
While WeFunder tends to favor food and tech companies, they're technically open to all types of businesses. They're also the biggest platform using the Title III equity crowdfunding.
Another equity crowdfunding site using Title III or Regulation Crowdfunding, they fund everything from clothing retailers to health care ventures. StartEngine offers their services to anybody, and they do it for as low as $100 depending on your business.
Focusing on high-impact ventures, Crowdfunder came out of LA back in 2012. Setup your profile for free and submit the Term Sheet, the Executive Summary, and the Investor Pitch Deck to get your campaign started. You'll have access to over 12,000 individuals and institutional investors on a site that currently houses $160,000,000 in investment commitments.
SeedInvest isn't for everyone - mainly because they've only approved about 1% of the companies that apply. They're a pretty exclusive option that focuses mostly on tech companies. So make sure you've got a strong investment pitch and business growth plan before taking the time to apply with them.
If your startup is considered more of a creative work or community project, then Indiegogo might be the equity crowdfunding site for you. But they also have options for business ventures that allow you to raise money from individual sponsors that are right for you.
AngelList is an equity crowdfunding site that also offers a job board for people looking to get work with startups. Plus, they're free to use for both sides of the coin.
Just remember that because they're free of charge, a lot of people flock to them. Meaning you'll have to find ways to make yourself stand out.
Part of a family of startup platforms that includes AngelList, Republic gives you access to investors from your community, a pool of potential customers, and retail investors that number in the millions. But the platform goes well beyond what most equity crowdfunding sites do - they also offer advice and support that's invaluable to a new business.
More Entrepreneur Tips
Access to capital can make or break a startup. With these top crowdfunding sites, you have access to individuals and other sponsors that you otherwise wouldn't. And with all different types to choose from, you can find an investment arrangement that works best for you.
Starting your own company isn't easy, which is why we're here to help. Check out our entrepreneur blog for more tips and advice.
Contributing Writer: Diana Jordan
You’re excited. You’ve prepared for this moment for months, maybe even years. The market is oversaturated with bad ideas waiting to fail but yours isn’t one of them. Your concept is innovative, your passion is contagious, and your gumption to transform it all into tangible success is unstoppable.
Now, you just need to convince investors to believe it too. ‘Just’.
No question, a potent pitch is the bridge between dream and reality. Without seed money from crowdfunding, even the best ideas suffocate.
Here’s how to get your first pitch right.
Be Transparent: Answer all the 5 Ws and keep it concise. Investors are smart and busy; they’ll see filler-fluff for what it is. Don’t inflate results or forecast what you can’t deliver. Elaine Pofeldt writes on CNBC, "To ace a pitch, by all accounts, it is essential to build trust with investors right out of the starting gate."
Make it Easy: Offer the big picture explanation in user-friendly terms. Intricate technical specs can be a sidebar for those who want them. Your pitch isn’t the platform for it; don’t be cryptic and overcomplicate things. Problem -- solution (AKA your product) -- result.
It’s Personal: Not every investor will champion something because its good. In fact, most want to support a Startup that’s relevant to their values. Don’t skimp on establishing the human connection for them.
Spotlight the Innovation: Your idea is unique/different/better from ‘the other guy’ because (your answer here). It’s imperative that you create a clear and piercing differentiator for potential investors.
Show the Evidence: People love facts and figures because they want proof and reassurance. Statistics are extremely convincing and powerful. Weaponize your research to anchor your purpose.
A recent post from HIPGive states, "A few objective facts or statistics will please the rational thinkers in your audience. They’re also a useful way of anticipating objections and/or answering concerns that people have about whether your approach really works."
Tell a Story: Take the five points above and deliver them in an eloquent narrative. Words are electric, and the right combination will carry a lot of voltage. Persuasive, sticky language will engage your audience.
A Strong Ask: It’s called ‘closing’ for a reason. Wrap it up with a compelling call to action. Make investors feel the time to act is now. If you lose them down the rabbit hole of contemplation, they may not resurface.
The Visual Resources: Yep, a picture is still worth 1000 words. Use colorful, quality images that vividly compliment your story. Charts, infographics, and campaign cards can quickly and effectively illustrate large amounts of data.
The Video: Aim for 120 seconds. Yoav Hornung explains in his article on The Next Web, "One minute videos are usually too short while five-minute videos are too long, even for the engaged audience. An optimal length of a crowdfunding video would be around two to three minutes.”
Finally, and it’s easier said than done but try and relax. Confidence (or lack of it) will seep through into your communication. Be approachable and present yourself and your brand with pride and conviction.
Remember, investors that frequent crowdfunding sites do so because they want to give. It’s up to you to grab their attention, persuasively convey your message, and gain their support. Your pitch is the X-Factor. Do yourself justice and bring it home.
"Don't worry about failure; you only have to be right once." - Drew Houston, co-founder and CEO of Dropbox
Article by Diana Jordan https://dianajordan.ca