“Use CrowdFunding, because you want to give everyone the opportunity to be able to participate in funding your idea – that adds “value” to lives and makes a significant contribution to the world” Wiz4.biz
CrowdFunding Topics: Leaders in: 1) Funding Campaigns, 2) Capital Commitments, 3) Success Rates & 4) Average Raised per Campaign + the Bottom Line.
For early-stage & growing Startups – interested in raising money online, it can be tough to choose a CrowdFunding platform, because there are so many out there. They rank differently, depending on whether you’re looking at the “size” of the platform, the total amount of $$$ it has raised, its overall “success rate”, or the average amount the platform “raised” per deal.
Who are the Leaders? Sourcing the best CrowedFunding deals leads to the best results. Yet, in the end, the data shows one platform leads in an area that may make all the difference in the eyes of the entrepreneur: average capital raised.
Category: Campaigns – #1 StartEngine 26%, #2 WeFinder 24%
Of the nearly 1,000 CrowdFunding companies that have registered to raise money online, 50 % chose to register on either StartEngine or WeFunder. And according to the data, it is a tight race, with StartEngine leading. According to Ron Miller, CEO of StartEngine, the platform’s success has to do with Sourcing & setting Expectations. “We have more successful campaigns, because we source the very best entrepreneurial talent out there. We also set appropriate expectations in terms of how much work it takes, to make a campaign successful, and we provide the coaching & support at each step of the process.” This sourcing & coaching probably explains why – over the past two quarters – the company’s new deal volume has surged.
Category: Capital Commitments – #1 WeFunder 30%. #2 SeedInvest 22%, #3StartEngine21
When it comes to total amount of money raised by platform, Wefunder is the leader, with > $38 million. To put this in perspective, since the market began, almost 1 out of every 3 dollars committed to all campaigns went to Wefunder. According to Wefunder cofounder & CEO Nick Tommarello, the company’s strength on this front has to do with its experience with Silicon Valley entrepreneurs & investors. “Our edge against other platforms comes from our background as “product-oriented” Tech Founders – who want to empower communities, not Broker/Dealers who want to take a slice of a transaction. When we attended accelerator Y Combinator, we were immersed in the Silicon Valley environment where our friends went on to start $B unicorns. From 2013-2016, WeFunder then invested in these types of startups. We had to learn how to get access to high-quality “over-subscribed” deals.
Category: Success Rate. #1 NextSeed 93%, #2 MicroVentures 86%, #3 Republic 85%,
When it comes to who closes the most deals, NextSeed leads the pack with a 93 % success rate – 28 of 30 of its deals have been funded. Nextseed CEO Youngro Lee said the platform’s high success rate has to do with focusing on a particular CrowdFunding model (debt), businesses Types (retail, bricks & mortar), and immediate, Easy-to-Understand returns. “We viewed the passage of the JOBS Act as an opportunity to democratize private financing in local communities — allowing everyday people to invest in local businesses. We thus focused our efforts on businesses & investment terms that an average investor could actually understand & appreciate. We only work on debt CrowdFunding for brick & mortar businesses, and all investments have a finite maturity and monthly payment requirements. We also seek to provide comprehensive services to our issuers throughout their campaign creation process – from start to finish – including Marketing & PR advice – providing templates, & supporting post-closing investor communication and payment servicing.”
Category: Average Raised / Campaign. – #1 SeedInvest $435K, #2 WeFunder $313K
When you drill down and look at what really matters — how much money the average campaign raises — the data reveals something powerful. While StartEngine & Wefunder might lead in the number of successful campaigns and NextSeed in the success rate, SeedInvest leads in this category, with an average raise of >$435K per campaign. From an entrepreneur’s point-of-view, this metric is likely the most important one. SeedInvest CEO Ryan Feit said the high average raise amount comes down to extreme vetting & the investor base. “With over 37,000 accredited investors, SeedInvest is by far the “largest” platform in terms of the number of high net worth investors. In addition – unlike other platforms – we have family offices, venture funds, & high net worth individuals who can write checks between $250K and $2 mill. This sets us apart from all other platforms and ultimately results in larger amounts raised for startups on SeedInvest. We have never been interested in simply trying to list more startups than other platforms or generate the most investment volume. Historically, we have only launched 1 % of the startups that apply to raise capital, but we invest meaningful time in those startups we select.”
The Bottom Line
If you are a brick & mortar entrepreneur looking to improve your odds of getting financed, consider heading to Nextseed. Chances are you’ll hit your funding target and do so in less time, than applying for a Bank Loan. If you are looking to get your campaign in front of potential backers, head to StartEngine (or WeFunder, where you’ll pay less in success fees). Keep in mind, you’re going to have to bring the majority of your investors to the deal yourself, They don’t just show up. But if your priority is simply to raise the most money possible, try SeedInvest (and I mean “try,” since they only accept 1 % of applicants). Entrepreneurs on SeedInvest are raising 89 % more than the current industry average of $244K. If you look at the last two quarters alone, investors are pouring their capital into SeedInvest deals ($9.5 million vs $7.7 million for StartEngine & $6 million for Wefunder).
Comments: What kind of experience have you had with CrowdFunding platforms?
from Venture Beat.com 09 June 18 enhanced by Peter/CXO Wiz4.biz