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Top 7 Equity Crowdfunding Platforms For Businesses & Entrepreneurs

    Erica Seppala
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Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

It takes money to make money. It doesn’t matter if you’re in the beginning stages of launching your business or you’ve been in the game awhile — capital is necessary to ensure the success of your business. Of course, there are loans, lines of credit, and other traditional types of funding available at your bank or through an online lender. But there’s another option that should be on your radar: crowdfunding.

If you’re only loosely familiar with the concept, you might think of GoFundMe’s brand of medical and charitable crowdfunding. You may also think of rewards-based crowdfunding platforms like Kickstarter and Patreon in which entrepreneurs and artists solicit funds from backers in exchange for a physical product or exclusive creative content.

What if I told you that there existed an entirely different form of crowdfunding — one in which entrepreneurs and startups receive funding from backers in exchange, not for gifts or products, but for an equity stake in the company? A crowdfunding campaign in which the backers are investors?

That’s what we’re here to talk about. In this article, we’re going to look at equity crowdfunding, what it is, and who could benefit from this type of funding. We’ll also offer our top recommendations for equity crowdfunding platforms.

Learn More About Our Top Picks

CompanyBest ForNext StepsBest For
Wefunder

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Best for regulation crowdfunding
Best for regulation crowdfunding

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EquityNet

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Best for entrepreneurs & small private businesses
Best for entrepreneurs & small private businesses

Visit Site

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Crowdfunder

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Best for tech & finance companies
Best for tech & finance companies

Visit Site

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Fundable

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Best for flexible crowdfunding options
Best for flexible crowdfunding options

Visit Site

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AngelList

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Best for crowdfunding with no monthly fees
Best for crowdfunding with no monthly fees

Visit Site

Read More

Other Featured Options:

Read more below to learn why we chose these options.

What Is An Equity Crowdfunding Platform?

Equity crowdfunding is a way to raise capital to start or grow your business. Investors invest money in a business in exchange for equity — typically in the form of shares in the company. So, an investor receives ownership in the company, and in return, the company receives the capital it needs to launch or expand.

This varies dramatically from rewards crowdfunding, which offers investors some sort of reward (i.e., a discounted or free product) in exchange for the investment. Aside from what the investor receives in exchange for their money, another primary difference between equity crowdfunding and rewards crowdfunding is how much money can be raised. Typically, equity-based crowdfunding is best for entrepreneurs and companies that need large amounts of capital to start or grow their businesses.

An equity crowdfunding platform is an online platform that allows you to pitch your business to potential investors. These platforms typically require a fee for the service but in exchange will allow you to post information about your business so you can connect with investors to meet your financial goals.

Equity-based crowdfunding got its start later than rewards crowdfunding because crowdfunding involving investments was, until relatively recently, illegal in the US. Enter the Jumpstart Our Business Startups Act, better known as the JOBS Act. Passed by Congress and signed into law by President Obama in 2012, the JOBS Act amended federal securities regulations to legalize equity crowdfunding. The reasoning was that allowing startups to publicly solicit investment via crowdfunding would help spur the economy in general and startup formation in particular.

In the business world, equity crowdfunding is new. In fact, the reality of equity crowdfunding hasn’t yet lived up to the loftier predictions of those who pushed its creation. Nonetheless, the fact remains that billions of dollars have been raised by startups and companies via equity crowdfunding. For the right kind of business, equity crowdfunding represents a prime opportunity.

If your company is still just getting off the ground, however, you might find that rewards crowdfunding is a better fit for your enterprise — investors tend to be less starry-eyed than the typical crowdfunding project backer. In this case, you might want to read our reviews of Kickstarter, Indiegogo, and Patreon. Bear in mind that in many cases, a successful rewards crowdfunding campaign can set you up for an equity crowdfunding campaign by showing proof of demand to potential investors.

Let’s take a look at the leading equity crowdfunding sites and what they have to offer growing businesses.

A Warning About Equity Crowdfunding Platforms

Let’s pump the brakes for a moment and go over the disclaimer on some of Merchant Maverick’s equity crowdfunding reviews:

Bear in mind that equity crowdfunding is a still-evolving field, with the full impact of the JOBS Act still being assessed. Equity crowdfunding is a more complex proposition than, say, rewards-based crowdfunding, as investing is much more substantially regulated. Consult an attorney if you have any legal questions regarding the process, SEC regulations, etc.

In short: Equity crowdfunding is legally complex. Be careful and don’t get into trouble!

Best Equity Crowdfunding Sites For Businesses & Entrepreneurs

If you’re looking for an alternative to traditional lending, look no further. If you want to raise large amounts of capital, consider equity crowdfunding. You can receive capital in exchange for a stake in your business — no loan payments, collateral, or credit scores required. Start your search with these top-ranked equity crowdfunding platforms.

1. Wefunder: Best For Regulation Crowdfunding

Wefunder



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WeFunder is the most successful crowdfunding platform to use Title III equity crowdfunding or Regulation Crowdfunding. In simpler terms, this means you can solicit investment from anybody — both from accredited investors and those who are not accredited.

US corporations and LLCs can use Wefunder. Of the 174 companies funded successfully through Wefunder, the company states that “most are alumni of Y Combinator.” The rare startup with exponential growth potential stands a decent chance of finding funding through the platform. Other businesses may have a tougher time of it. Tech and food companies seem to comprise the majority of funded startups on Wefunder.

To use the platform, Wefunder requires a $195 one-time fee before you can start crowdfunding. Wefunder is an all-or-nothing crowdfunding site and will take 7% of what you earned as a platform fee if you hit your crowdfunding goal.

Get Started with Wefunder

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2. EquityNet: Best For Entrepreneurs & Small Private Businesses

EquityNet



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EquityNet stands out because it doesn’t just serve high-tech or high-growth businesses. Instead, this company markets itself to a broad range of entrepreneurs and private businesses. EquityNet does not have a prescreening process, so your business can be on the platform quickly and easily.

EquityNet offers entrepreneurs and businesses alike the ability to use its equity crowdfunding platform. EquityNet’s equity campaigns operate under Title II rules, so you’ll be raising funds from accredited investors only. You’ll also get to keep everything you raise regardless of whether you hit your funding goal.

EquityNet operates on a subscription basis. While you can sign up with EquityNet and publish your business profile for free, a subscription is required to access fundraising documents, use EquityNet’s business planning tools, and take advantage of other services. One-time subscription fees range from $900 to $25,000.

Get Started with EquityNet

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3. Crowdfunder: Best For Tech & Finance Companies

Crowdfunder



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Crowdfunder is an equity crowdfunding platform that is best for early-stage startups, as well as: established businesses that are raising seed, Series-A, and Series-B funding. While Crowdfunder accepts a variety of businesses across all categories, its current campaigns show a high number of businesses in the tech and finance industries.

Crowdfunder allows companies to raise money via Title II equity crowdfunding. This means your crowdfunding campaign can solicit investments from accredited investors only. An accredited investor is someone that has a net worth of $1 million after deducting their principal residence or a person that has made $200,000/year for the past three years.

To launch a Crowdfunder campaign, you must sign up for a subscription, which starts at $299/month. You must also submit a Term Sheet, an Executive Summary, and an Investor Pitch Deck. These documents are complex and are best completed by an attorney. Crowdfunder will then review your documentation and determine if your crowdfunding campaign will be accepted on its platform.

Read our in-depth review

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4. Fundable: Best For Flexible Crowdfunding Options

Fundable



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Fundable is a crowdfunding site that offers both rewards and equity crowdfunding campaigns (though not both simultaneously). For the purposes of this article, we’ll focus on its equity crowdfunding campaigns, though its rewards campaigns may be something to keep in mind for the future.

Fundable is a flexible crowdfunding platform in terms of campaign types you can launch through the site. It is important to note, however, that Fundable does pre-screen businesses before allowing them to begin fundraising, so make sure you have everything in order before you begin the process.

Fundable is another crowdfunding platform that doesn’t take a percentage of what you raise but rather charges a fee to launch a campaign. Fundable’s Standard package is priced at $179/month, or you can take advantage of the Premium package for a one-time cost of $2,499.

Read our in-depth review

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5. AngelList: Best For Crowdfunding With No Monthly Fees

AngelList



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AngelList is one of the leading equity crowdfunding platforms that doubles as a job board for job-seekers trying to find a position with a startup. AngelList distinguishes itself by being the rare crowdfunding platform that allows entrepreneurs/startups to raise money free of charge. All fees are paid by investors.

Anybody can sign up with AngelList and attempt to raise money from the accredited investors on the site. However, AngelList doesn’t quite provide the guidance that many other crowdfunding platforms give you. There’s relatively little information for startups as to how you launch your campaign, so be prepared to do some research. But the research may well be worth it, as AngelList has an excellent public reputation and is highly rated by those who have used the platform to conduct equity raises.

Companies using AngelList raise money through investment syndicates. Essentially, accredited investors give money to “angel” investors who then invest the pooled money into companies on the platform. You won’t have to pay a monthly charge or a cut of what you raise to AngelList. However, keep in mind that there are other charges associated with arranging an equity deal with investor syndicates on AngelList (think paperwork, legalities, etc.).

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6. SeedInvest: Best For Startups With High Growth Potential

SeedInvest



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SeedInvest is an exclusive platform that offers Regulation Crowdfunding. By SeedInvest’s own estimation, only 1% of the companies who have applied to use the platform have been approved. This platform is only for startups with the highest growth potential, so be aware … and be prepared for an extensive vetting process. But if accepted, you have the ability to raise as much as $30 million.

Tech companies seem to dominate the list of offerings on SeedInvest’s site. I’ll note that while many crowdfunding sites refuse to have anything to do with cannabis-related companies, SeedInvest appears not to be one of them. “Green” startups, take note!

You have to pay to play with SeedInvest’s platform. The fee structure is a bit complicated, particularly when compared to other platforms on this list. But expect to pay a 7.5% fee charged on the total amount raised in the round, 5% warrant coverage or equity based on the total amount raised, and up to $10,000 for due diligence, escrow, marketing, and legal expense reimbursements.

Read our in-depth review

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7. MicroVentures: Best For Businesses With A Unique Idea

MicroVentures



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MicroVentures is another example of a Regulation Crowdfunding platform. According to MicroVentures, it mainly invests in industries including internet technology, media and entertainment, software, green technology, mobile, social, and gaming.

Per the company, “MicroVentures looks for businesses that have a unique idea or a new spin on an old technology.” MicroVentures also goes on to note that less than 5% of businesses that apply are added to the platform.

MicroVentures fees include a $99 application fee, a $250 due-diligence fee, and 5% of what you raise. MicroVentures is an all-or-nothing crowdfunding site. If you raise some money but fail to meet your funding goal by the time your campaign ends, you’ll get nothing.

Read our in-depth review

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What You Should Look For In An Equity Crowdfunding Site

Now you should have an idea about some of the big players in the equity crowdfunding space. But how do you decide which one of these — or maybe another platform entirely — is the right one for you? In order to narrow down your choices, keep note of the following factors you should look for in an equity crowdfunding site.

Value

This doesn’t just mean looking for the site with the least-expensive fees. Sure, one site may have low fees, but does it attract the type of investors that are eager to work with companies like yours? On the other hand, one site may charge outrageous fees and provide a lot of “extras,” but will these be beneficial for your business and your fundraising goals?

When researching crowdfunding sites, take into account all fees, which may include a subscription fee, a percentage taken from raised funds, legal fees, and other associated costs. Then evaluate the needs of your business and what is offered on the platform. Ask yourself if you can afford the fees, and decide if the features offered are beneficial to your needs and worth the expense. If not, keep looking.

Industries Served

Some platforms specialize in working with businesses in the tech industry. Others are looking for businesses that have new and unique ideas. Some crowdfunding sites are extremely picky over the businesses added to their platforms and will only take those that show the most growth potential.

While there are plenty of crowdfunding sites that cater to a variety of different industries, consider sites that specialize in your specific industry. While not guaranteed, this can help improve your chances of reaching the right investors. For example, your tech startup may get lost among different businesses and industries on one platform but may stand out on a site that caters specifically to tech businesses.

Resources & Support

New to crowdfunding? Look for a crowdfunding site that’s easy to navigate, offers excellent customer support, and has a variety of resources to help increase your odds of a successful campaign. Some sites are designed for later-stage companies that have prior experience with crowdfunding. If you’re a newbie, avoid these sites and find one that’s beginner-friendly.

One last thing to note is that sometimes these resources may come at a cost. For example, you may be required to pay a subscription fee or upgrade your account to get personalized help, legal documents, and other resources and support.

All Or Nothing VS Flexible Funding

Some crowdfunding sites have an “all or nothing” policy. If you raise all of your funds, great — you’ve met your goal and can collect your funds. If you don’t reach your goal, though, you don’t get to keep funds, even if you fall just a little short.

If you have a set goal that you have to meet, these platforms will be fine for you. However, if you could use capital even if it falls a bit short of your goal, look for a site that has flexible funding options.

Meets Your Goals

Make sure that the platform you select allows you to raise the amount of capital needed to launch your business or take it to the next level. If you’re looking to raise $2 million, for example, a platform that only allows fundraisers up to $1 million isn’t the best choice.

FAQs About Equity Crowdfunding

How is equity crowdfunding different from other types of crowdfunding?

Equity crowdfunding is different from rewards-based crowdfunding in several ways. The most obvious way is that investors receive a stake in your company in exchange for capital. Rewards-based crowdfunding does not require you to give up equity but instead to provide some type of reward (such as a free product) to investors.

Equity crowdfunding is also better suited for startups and entrepreneurs that are seeking larger amounts of capital — typically $50,000 or more. Rewards-based crowdfunding may be a better fit for smaller capital needs.

Is crowdfunding a good idea for startups and entrepreneurs?

Crowdfunding can be an excellent way for startups and entrepreneurs to raise capital. However, there are a few points to be aware of. Crowdfunding does take more time and effort than other forms of funding, such as getting a small business loan, so be prepared to put in the work.

Even after putting in the sweat labor, your campaign also may not be a success. Many platforms have an “all or nothing” policy meaning that if you don’t meet your fundraising goal, you won’t get any of the money.

While it may seem appealing to not have debt as you would with a loan or traditional funding, you do have to give up ownership in your company, which cuts into your potential profits in the future. Also, don’t forget to calculate platform fees, legal costs, and other expenses to launch and complete your crowdfunding campaign.

How do equity crowdfunding sites make money?

Equity crowdfunding sites make money from fees, whether it’s a one-time membership fee or a monthly recurring subscription fee. Others take a percentage of your raised funds. In many cases, you — the person raising funds — will be responsible for paying these fees. However, some platforms pass along their fees to investors that use their sites.

How do equity crowdfunding investors make money?

Equity crowdfunding investors make money through their shares of ownership in the company. If the company is profitable, the value increases. Investors can decide when to sell their shares, typically after the value is enough to cover their initial investment plus add a profit into their pockets.

An Equity Crowdfunding Platform To Fit Your Needs: Final Thoughts

Equity crowdfunding has only been around for a few years. Suffice to say, it is a work in progress. If you play your cards right, however, it might be just the thing to take your startup to the next level. If you’ve done your due diligence in preparing your offering and you possess the ability to excite investors, professional and amateur, then it’s certainly an avenue worth exploring.

In Summary: Best Equity Crowdfunding Sites For Businesses & Entrepreneurs

  1. Wefunder: Best for regulation crowdfunding
  2. EquityNet: Best for entrepreneurs & small private businesses
  3. Crowdfunder: Best for tech & finance companies
  4. Fundable: Best for flexible crowdfunding options
  5. AngelList: Best for crowdfunding with no monthly fees
  6. SeedInvest: Best for startups with high growth potential
  7. MicroVentures: Best for businesses with a unique idea
Erica Seppala

Erica Seppala

Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
Erica Seppala
View Erica Seppala's professional experience on LinkedIn.
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12 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Michael Perrone

    Hi
    Thank you from me as well, for such a thorough well thought out assessment of these major options.
    It is certainly confusing to someone without some comparative information of the sort that you provided so profficiently. You saved me hours and hours, and might have single-handedly gotten me to get off the fence and actually select a funding direction.

    Here is something that I could not help but wonder, as I read various options here…: What about where the idea has no simply patentable “product”, but rather is expansive enough that it would rely on barriers of entry and a headstart (with the right exclusive partners) to succeed, by building brand recognition and trust? The real question is.. Without a patent, what is to prevent those investors you pitch from running with an idea themselves, or repackaging and selling it to some other VC? When I last presented my idea to a private investor who bankrolled a startup, sold it, and was looking to do it again – I had him sign a NDA.

    Best regards, Mike

      This comment refers to an earlier version of this post and may be outdated.

      Emily Hale

      Hi Michael,

      Thanks for the comment. You raise some food for thought. While we don’t have this particular legal expertise and don’t feel confident offering advice, signing an NDA seems like a wise decision. Best of luck!

        This comment refers to an earlier version of this post and may be outdated.

        Jamie

        Why didn’t you include StartEngine? They seem to be the biggest in the US…

          This comment refers to an earlier version of this post and may be outdated.

          Julie D

          Hi Jason,

          Thanks for the thorough reviews. I would be interested in what your opinion of Impact 101 Crowd Funding is. A relative of mine is interested in working for them and they do not seem legit in my opinion.

          Kind regards,
          Julie D

            This comment refers to an earlier version of this post and may be outdated.

            Jessica Dinsmore

            Hi Julie,

            Unfortunately we haven’t yet reviewed Impact 101, so we can’t confidently give an assessment one way or the other.

              This comment refers to an earlier version of this post and may be outdated.

              Mark W. Clayton

              Jason,

              What would be the best crowdfunding site to pitch a new and innovative mop. Think the movie Joy. Patent should be issued in the next 6 months.

              It’s a great high volume mop with a low price point that we vision 2 in a package that would be a good for a Costco & Hone Depot retail placement as well as on Amazon & HSN.

              There is a need for this mop in the market; if provides a cost effective solution that other mops don’t. Designed by a maid for maids & the general consumer.

              What equity crowd funding site should I take this for a funding campaign.

              Thank you,
              Mark
              captmarkwclayton@gmail.com

                This comment refers to an earlier version of this post and may be outdated.

                Jason Vissers

                Hi Mark! I can’t say with any certainty which equity crowdfunding platform would be best for your particular project, but what I would do in your position is to get ahold of someone in each of the equity crowdfunders mentioned here to describe your project and see what each has to say about how suitable your endeavor is for their platform. You’ll likely have better luck with certain platforms over others (SeedInvest brags about how ultra-exclusive they are, for instance), and it’s possible they may recommend that you first launch a rewards crowdfunding campaign and then use the success of that as a basis for launching an equity raise, as a high-quality mop would make for a great reward in a rewards crowdfunding campaign.

                If you can get feedback from multiple equity crowdfunders, you can learn exactly what each one can offer you, and you can also see if there’s any agreement/convergence regarding the advice they give you about how to structure your campaign.

                Thank you for your comment, and I wish you the best of luck with your crowdfunding campaign!

                Cheers,
                Jason Vissers, Merchant Maverick

                  This comment refers to an earlier version of this post and may be outdated.

                  mike sayegh

                  Are there crowd funding site for raising of debt for a business starting at $3 million plus?

                  Thanks

                    This comment refers to an earlier version of this post and may be outdated.

                    Jason Vissers

                    Hi Mike! While most debt crowdfunding sites are geared toward much smaller raises, a few of the big equity crowdfunding outfits are also open to facilitating debt raises. I’d recommend contacting someone at a company like EquityNet to see what they can do for you.

                    Cheers!

                      This comment refers to an earlier version of this post and may be outdated.

                      adughi iyamba

                      can a business outside USA raise funds through this platform?, can African country qualify to raise funds here. tanks

                        This comment refers to an earlier version of this post and may be outdated.

                        Jason Vissers

                        Hello Adughi! The platforms listed in this article only host equity fundraising campaigns for US-based businesses, so for businesses based in Africa, I would recommend looking at Indiegogo, which is one of the few major crowdfunding platforms that hosts fundraising campaigns based in Africa (and nearly everywhere else on Earth).

                        Thank you for your question!

                          This comment refers to an earlier version of this post and may be outdated.

                          Gustavo

                          Thank you for this nice review! It addressed the question on how to navigate among so many good options with no bias to defend one specific platform. Congratulations, Jason Vissers!

                            This comment refers to an earlier version of this post and may be outdated.

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