Equity crowdfunding has became not just a way for companies to raise money, it is also a way for the everyday investor to invest not just because they love a certain company, but also for a return on their investment just as any investor would want.
Over the years, the Equity Crowdfunding Investing sector has risen and is continuing to grow at higher rates each year. Even more, there has been several success stories of companies who was able to make an exit.
In 2016, Medium published a very interesting article that opened my eyes to a whole new life of possibilities. Within the article, which I've posted a very important section of it below, basically explains that the entire industry is growing at a pace that will be on par with the standard funding industry such as VC, bank and angel funding.
But before you read the passage, take a look at the graph chart from the article which gives you a better visual on what is going on in the Funding Industry between 2009 -2015.
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| Annual Funding in Billions: VC vs Angel vs Crowdfunding - via Medium |
As Posted on Medium:
"By the end of 2016 the overall crowdfunding industry is on track to account for more total funding than the average annual investment from the venture capital industry (according to the most crowdfunding figures published by the most recent report by Massolution ).
Just five years ago there was a relatively small market of early adopters crowdfunding online to the tune of a reported $880 million in 2010. Fast forward to today and we saw $16 billion crowdfunded in 2014, with 2015 estimated to grow to over $34 billion.
In comparison, the VC industry invests an average of $30 billion each year. While 2015 netted out as one of the largest years since 1995 at $58.8 Billion invested, according the PwC Moneytree Report.
Meanwhile… the crowdfunding industry is doubling or more, every year, and is spread across several types of funding models including rewards, donation, equity, and debt/lending.
And now under new laws enacted in 2013, equity crowdfunding has sprung forth as the newest category of crowdfunding and is further accelerating this growth and disruption."
After reading this article, one can only feel more reassuring and confident to take part in this concept which isn't new, but is now widely available to the general public.
With growth comes changes. You see, typically when an sector is growing, especially at rates that the equity crowdfunding investing sector is growing at, changes starts to happen. Standards are formed and adopted, trends start to occur, new ideas along with companies within the industry starts to flourish and multiply, secondary and complimentary sectors begin to form and expand, etc.
All of these factors gives the main industry a sort of insurance, which is absolutely necessary especially when dealing with financials.
Also, you may ask after reading the passage, "why exactly is the equity crowdfunding sector growing so quickly other than the obvious- invest in a company and hope to earn a big return?"
Well the answer is quite simple and quite interesting when you understand the trends and changes that is taking place in the industry. When you look at the current popular funding models within the crowdfunding industry, equity crowdfunding investing stands out because of what it could offer.
With rewards and donation crowdfunding, they are geared towards giving for the love of the company or simply, because you want to see maybe your favorite startup or a certain product come to fruition. In the end, you have no ownership stake in the company while ending up with maybe the product that you crowdfunded and in the case of donation crowdfunding, nothing.
With P2P Debt/Lending Investing, this is a little bit better given that you can actually see a return on money you give. You find the loans you want to invest in and earn a fixed amount every month until the loan is paid off plus interest.
While this may be a more viable and quicker way for you to earn your money back and shares the same attributes as equity crowdfunding investing, they are completely different and in terms of P2P Debt/Lending Investing, while predictable, the returns are comparatively lower, if your talking about investing on a larger scale.
The Current State of Equity Crowdfunding Investing
for Non Accredited Investors
To get a better idea of why the equity crowdfunding sector is experiencing such a rapid growth so quickly, you have to take a look at some of the factors that are occurring within the sector. Up until the JOBS Act: Title III went into effect, equity crowdfunding was technically only available to accredited investors under the JOBS Act: Title II-
A person in the U.S. is accredited if he/she meets either of these two criteria:
- $200k in income for each of the past 2 years (or $300k with a spouse), with the expectation of similar earnings this year
- $1m in net assets (assets minus debts)
This stifled the industry slightly and kept it from growing to its ultimate potential by limiting the key factors- the type of investors who can invest, the type of companies that can raise money and more importantly the platforms that bring the companies and investors together.
Once the Jobs Act: Title III went into effect, unaccredited investors were now able to get in on some of the investments and companies can raise money from a broader selection of investors.
A non accredited investor is an investor who does not meet the net worth requirements for an accredited investor under the Securities & Exchange Commission's Regulation D. A non-accredited individual investor is one
- who has a net worth of less than $1 million (including spouse) and
- who earned less than $200,000 annually ($300,000 with spouse) in the last two years
For more about the Jobs Act, we recommend checking out the article below.
This opened the door for possibilities, including the factors that are fueling the growth of the sector. The top 3 factors of the sectors growth can be attributed to
- the expanding categories within the sector along with new and better deals are being offered everyday
- the amount of platforms available and quality of those platforms has grown and improved greatly
- Access to secondary marketplaces which provides liquidity for investors
Expanding Categories and Better Investments
Currently, the Equity Crowdfunding Sector consists of 3 main categories- Startup/Business Investing, Real Estate Investing and Mixed Investing, each with its own unique characteristics.
These days, the amount of investments and offerings has risen because crowdfunding platforms has made it easier for entrepreneurs to gain access to necessary funds needed to get their startup off the ground. It is also a way for companies of all sizes to access funding whether it is for a new project, expansion, or whatever reason funding is needed without going through the standard channels that are more difficult to obtain and expensive.
Under the Startup/Business Investing categories, you will find numerous startups in many industries from clean tech, finance, education, consumer electronics, gaming, healthcare and many others. There is practically no type of company you can't look for and cant find that is raising funding via equity crowdfunding.
Under the Real Estate Investing categories, the types of deals is pretty much straight forward-
- Direct Equity/Debt Investments
You can find lots of platforms with "eREIT" and direct Real Estate Crowdfunding Offerings.
Now an “eREIT” is a real estate investment trust, or REIT, offered directly to investors online, without any brokers or selling commissions. Each eREIT intends to invest in a diversified pool of commercial real estate assets, such as apartments, hotels, shopping centers, and office buildings from across the country.You earn potential returns based on the real estate investments made by each eREIT that you invest in.
Unlike REITs, in which investors have no control of which properties are being purchased, Real Estate Crowdfunding allows investors to select and invest in individual properties that are being offered. These can range from multifamily developments and shopping centers to micro-unit residences and self-storage facilities, and can be in urban or suburban areas across the country as well.
Both are great investments and the offerings these days comes in a wide range of focused niches like such as Debt, Rentals,Affordable Housing, Urban Development and Student Housing.
Under the Mixed Investments categories is where it starts to get really interesting. Ever since the new regulations went into effect, you can do a little search only to find that on top of the platforms dedicated to startups and real estate offerings, there has been many platforms dedicated to niche industries that gives non accredited investors the opportunity to invest in their equity crowdfunding offerings.
You can invest in non traditional equity crowdfunding offerings such as songwriter royalties, oil and gas wells, p2p lending, solar projects, a variety of cannabis and hemp-related startups, social enterprises and movies and documentaries.
Better Platforms
With the fast pace rise of this new industry, more and more equity crowdfunding portals/platforms began to sprung up. Given the nature of the boom, one would expect this, and because of this and the need/want for better offerings, platforms started adjusting to accommodate the growth of the industry.
While most of the platforms main operations was just facilitating transactions between everyday investors and startups raising funds, many platforms both new and established, has evolve to into full service platforms. The top platforms in this space usually share common qualities to accommodate both companies and investors but mainly to set certain standards for the young, growing industry.
Many of the platforms offer low minimum investments as a highlight to their platform. While investing in startups and businesses will always be risky, being able to do it with just $5, $10, $20 or even $100 makes that kind of risk more digestible even to new, everyday investors.
These types of minimums allow for anyone to get in on these deals without the risks or worries of losing everything. For example, you may decide you want to start out with $100. You’ll be better off by spreading that across two investments for $50 each (perhaps even on two different equity crowdfunding sites) or even four investments at $25 each.
Another stand out service that we will mention now but cover later are the secondary markets for your investments. Secondary Markets are crucial when dealing with any type of investment. If for some reason you are in need of quick cash or you just think it is time to sell, you need somewhere to sell your shares.
What made things complicated in the beginning was the fact that there was no market to sell your shares in a company that was funded via equity crowdfunding. Now, there's several platforms that has opened up a marketplace to buy and sell shares of equity crowdfunded offerings. While not at its peak, it is a important and growing sector of the industry.
A very integral part of every equity crowdfunding portal/platform success has always been tied to the community that is built around the platform. Along with active blog sites and active userbases, many platforms have been forming investor groups or "syndicates", which can provide investors with better and additional investment opportunities, share insights and ideas with other investors and invest in companies as part of the group.
One of the main benefits of investor groups is that they can invest more money per deal as a group. By doing so, they can reach startups that might have high minimum commitments they couldn’t match on their own.
Typically, a standard equity crowdfunding platform will usually
- have an established history and track record (at least as much as possible in such a young market), with credible founders and/or venture investors
- have a wide selection of investment choices like real estate offerings, funding the production of movies, documentaries and albums, including at least a few of the kinds of everyday businesses most people are familiar with (like a restaurants, distilleries or a new social media app)
- have low minimum investments, usually between $10-$100, some with $5 offerings
- are open to anyone to invest- both accredited and non accredited investors, either through Reg CF offerings, Reg A+ offerings, or both (though some sites also have some offerings only available to what are known as “accredited investors”)
- have clear regulatory obligations and standards, and perform at least minimum due diligence on the opportunities they list (because they are registered with the SEC as Title III Funding Portals, registered broker-dealers, or both)
Access to Secondary Markets
A equity crowdfunding secondary marketplace is a financial market where investors can buy and sell securities. In its core, a secondary market allows investors to buy and sell shares to and from other investors in startups and businesses that have raised funding through equity crowdfunding offerings.
Secondary marketplaces operate as a middleman for investors that might
- want to get rid of unwanted and highly risky investments
- acquire shares in companies whose funding period is over but has not made an exit
- increase ownership rights in a company by acquiring more shares of a company they've already invested in
There's many reasons that drives the nature of secondary markets of equity offerings but the 2 main factors are:
- Supply and demand of the company’s stock.
- Liquidity for early shareholders
Currently, there's several platforms that are opening up marketplaces directly on their platforms that allows investors to buy and sell their equity investments. For more about Marketplaces and a List of Equity Crowdfunding Secondary Markets, check out
Equity Crowdfunding Investment Platforms
Real Estate
Most of the of real estate crowdfunding platforms below allows nonaccredited investors to invest in the offerings on their platforms. The platforms offers "eREIT" and direct real estate crowdfunding offerings with some, having minimum investments as little as $5.
Fundrise Fundrise Using SEC Reg A+, Fundrise offers several “eREIT” products open to non-accredited investors, with a minimum investment of $1,000. Each eREIT invests in multiple properties, so you get a degree of diversification even at the minimum amount.
RealtyMogul RealtyMogul is an online marketplace offering crowdfunding for real estate investing opportunities. Investments include multi-family dwellings, office buildings, industrial sites, self-storage, retail, medical buildings and hospitality establishments. Also utilizing Reg A+ with over 157,000 investors on the platform, RealtyMogul allows you to invest in what they call the MogulREIT, with an advertised return of 8% and also with a minimum investment amount of $1,000.
Patch of Land Patch of Land is a crowdfunding real estate through its P2P (peer-to-peer) online marketplace offering various typologies of secured real estate debt on assets backed by first position liens and personal guarantees. We match investors and lenders seeking alternative fixed income opportunities to borrowers seeking alternative sources of financing for their real estate investment needs. The minimum investment is currently $5,000 per investment, unless a lower amount remains open for a particular investment opportunity.
Rich Uncles Rich Uncles has two types of REIT Deals, the National REIT And Student Housing REIT. The National REIT has a minimum investment amount of $500 (though you can increase that in $50 increments), with an advertised return of 7%. While they have set some minimum income or net worth requirements (some of which vary by state), they are significantly lower than the standards for being an accredited investor (for example, you may qualify to invest with an income of $70,000).
The other, Rich Uncles Student Housing REIT intends to purchase modern properties that were purpose-built for university student living environments, creating a portfolio expected to generate a 6% annualized dividend for our shareholders. The REIT acquires desired student housing properties located within a one-mile walking distance of major NCAA Division I universities that have over 15,000 students enrolled. The minimum investment is as little as $5
Buy the Block Buy the Block is a Reg CF real estate crowdfunding platform with a focus on real estate residential and commercial development projects. The minimum investment is $100 or $10 for KidVestors (Custodial Accounts).
GROUNDFLOOR GROUNDFLOOR real estate offerings are open to non-accredited investors, and is very similar to the many other Reg D platforms, by offering debt investments in individual properties. The minimum investment amount can be as low as $10 for some of the properties, though Groundfloor is only available in some states (MA, MD, DC, VA, GA, IL, TX, WA, CA at the time of this writing).
C.K. Mack C.K. Mack allows you to invest in real estate offerings. The investment platform takes the cash flow from rented real estate to create a new investment product that provides you with monthly returns. First, they buy rental properties and find quality tenants.
They manage the properties and take care of any issues that comes up with any of the properties. When rent comes in, they take out all of the typical fees and escrows for potential disasters. Everything that is left over is then distributed to you, the investor. Only available to Montana and Washington residents. The minimum investment is $25.
Tulsa Real Estate Fund Tulsa Real Estate Fund (TREF) is a Reg A+ Tier 2 Real Estate Crowdfunding Platform with the aim of revitalizing the urban community by financing urban redevelopment around the world. The crowdfunding vehicle, allows members of the community, institutions, and advocacy groups to own an equity stake in redevelopment projects funded by Tulsa Real Estate Fund. The minimum investment is $500.
Holdfolio Holdfolio Investors purchase a fractional ownership interest in a portfolio of 10 single-family rental properties (or a single apartment building), receiving both fixed interest payments and a profit-share upon sale or refinance.
Startups and other Businesses
Some of the best crowdfunding offerings for non-accredited investors are in financing startups and small businesses, with some offerings having minimums as low as $10. We covered many of these platforms in 5 of the Best Equity Crowdfunding Sites for Beginning Investors, and you can also read some tips for quickly reviewing investment choices in The One Underrated Skill Every Crowdfunding Investor Should Practice:
Republic Republic is an investment platform where everyone can invest as little as $10 in innovative startups curated by our team. Republic was founded and built by AngelList alumni who believe angel investors are the catalysts to change in the world. The minimum investment amount starts at $10.
First Democracy Indiegogo and MicroVentures, two leaders in the crowdfunding and investing space, created an equity crowdfunding platform, First Democracy VC, that allows anyone to make a financial investment in innovative startups, active businesses, movie & music projects, and much more. The minimum investment amount starts at $100, but startups set the minimum they will accept.
Wefunder Wefunder is a crowdfunding platform connecting investors with startup founders. Over 153 companies, including Zenefits, Checkr, CaseText, Gingko Bioworks, Freight Farms, and Goldbely, many of which are alumni of Y Combinator have raised funding on WeFunder. Minimum investment is $100.
SeedInvest SeedInvest is a leading equity crowdfunding platform opening up access to venture capital and angel investing to everyone. The minimum and maximum investments for a given round are determined by the company raising capital.
CrowdCube Crowdcube is a British investment crowdfunding platform that enables individuals to invest or loan in small companies in return for equity or an annual return. The minimum investment of £10 into startups.
Microventures MicroVentures is an equity crowdfunding website offering investments in early stage companies. Founded in 2009, they started by offering traditional angel and venture investments to accredited investors, but in smaller dollar amounts and exclusively online. MicroVentures connects accredited investors with startups, businesses and services looking to raise funds or participate in select secondary market opportunities. Minimum investment can be as low as $100.
EquityNet EquityNet is a U.S.-based business crowdfunding platform for startups and mature businesses to raise equity capital from more than 12,000 investors that has funded more than $217 million in capital.
Gridshare Gridshare is a unique crowdfunding platform offering Reg CF debt and equity investments in renewable energy projects and cleantech companies (like solar and wind installations), Gridshare is open to anyone, with a $100 minimum investment
Companisto Companisto is an investment platform that enables you to invest in growth companies and start-ups online. Our minimum investment amount is €100 and no transaction fees or user account fees.
Razitall Razitall is an innovative equity crowdfunding platform that help small businesses to raise up to $1 Million per year from anyone and everyone. You pitch, you bid, and everyone wins. Get lots of small investments from everyday people. The platform allows investors to Bid on Ownership, Royalty and Venture pitches and become a stakeholder and get financial returns. You can also Bid on Pre-sale pitches to become a customer and be the first to receive new products/services. Each pitch starts with an initial minimum bid which is the lowest price to invest. It changes based on the bidding activities.
TruCrowd TruCrowd is an equity crowdfunding portal based in Chicago, connects startups and emerging businesses with non-accredited and accredited investors. The minimum investment is $100.
NextSeed NextSeed is a crowdfunding portal where accredited and non-accredited investors can gain access to exclusive alternative investments in local businesses. Investments on NextSeed are one-time investments and the minimum is $100
Seedrs Europe’s largest equity crowdfunding platform, Seedrs allow investors from a variety of backgrounds to invest with ease into innovative startups and other growth-focused businesses. Usually, the minimum investment is £10, although this may be higher or lower, depending on the specific campaign.
LocalStake LocalStake allows you to invest in Reg CF, Reg D, and Intrastate crowdfunding investments in small and local businesses. The minimum investment amount usually starts at $200.
VentureCrowd VentureCrowd is an Australian multi asset class crowdfunding platform, headquartered in Sydney, including equity crowdfunding, property crowdfunding and debt-based crowdfunding. The minimum investment is $1,000.
Angels Den Angels Den is an online investment platform that connects businesses with angel investors. Minimum investments start at £500.
AngelList AngelList is a platform for startups to raise money online, recruit employees, and apply for funding. The minimum investment amount is $1000.
Fundable Fundable is a powerful fundraising platform that enables Startups to quickly engage a large network of Backers to raise capital. Startups can offer potential backers Rewards or Equity in exchange for funding. The minimum investment amount is $1,000
StartEngine StartEngine is an equity crowdfunding platform that connects startups with investors online and allows accredited and non-accredited investors the opportunity to invest in Reg CF and Reg A+ investments within a wide range of early-stage startups. The minimum investment is $100.
CrowdSourceFunded CrowdSourceFunded is an SEC-registered Title III Funding Portal using Reg CF to offer crowdfunding investments in startups and small businesses to anyone. The minimum investment is $200.
WunderFund WunderFund is a unique equity crowdfunding platform that lets investors invest in startups and companies worldwide. The minimum investment is $100.
DreamFunded DreamFunded is a world-class equity crowdfunding platform providing exclusive insider access to some of the most sought after seed and late stage private companies in the world. The minimum investment amount is $60
GrowthFountain GrowthFountain is a funding portal empowering businesses to raise capital online. For entrepreneurs, we have simplified the process of running a fundraising campaign. For investors, we have designed a platform that makes it easy to discover, support and invest in a neighbor, local business, or the next big idea. The minimum investment is $100.
EquityBender EquityBender provides an online platform for investors to identify, evaluate, and invest in early-stage media, technology, and consumer companies that meet their personal portfolio requirements. There is no stated minimum investment for EquityBender listed.
NetCapital NetCapital is a Reg CF platform offering startup investments for as low as $99. Netcapital empowers companies to raise capital by offering investment opportunities to the general public, including your friends, family, customers, vendors, suppliers, angel investors etc.
Creative, Mixed Media, and Others
Vezt Vezt provides a digital market place for artists and songwriters to offer a percentage of their future artist and songwriter royalties, respectively, to fans, friends, rights-buyers and brands for royalty-based financing in a monetization process called an Initial Song Offering™ (ISO™).
EnergyFunders EnergyFunders is the first equity crowdfunding platform dedicated to the energy industry. For companies raising capital or investors looking for oil and gas investments.
Calvert Impact Capital Calvert Impact Capital lets users invest as little as $20 online in a community note that invests in a host social enterprises such as health,micro-finance, women investing in women, affordable housing, renewable energy or sustainable farming.
Swell Swell allows you to back companies chosen for their environmental, social 'and governance credentials and their alignment with the U.N. Sustainable Development Goals. Swell offers six portfolios focused on social and environmental industries such as green tech, renewable energy, zero waste, clean water, healthy living, and disease eradication. The minimum investment is $50.
Crudefunders Crudefunders is an online Oil and gas crowdfunding investment platform that gives you the opportunity to own a piece of an oil well for as little as $1000.
Wunder Capital Wunder Capital connects individual, institutional and corporate investors with great solar projects that need financing. Wunder Capital has two investment options,
The Wunder Term Fund and The Wunder Income Fund, both with a minimum of $1,000.
CannaCrowd CannaCrowd is a Cannabis-oriented offshoot of Reg CF platform GridShare, offering low-minimum investments in cannabis and hemp-related startups and open to all investors.
Fundanna Fundanna is the first equity crowdfunding portal dedicated to the cannabis industry and a Cannabis-oriented offshoot of Reg CF platform TruCrowd, offering low-minimum investments in a variety of cannabis and hemp-related startups. Invest as little as $100 in cannabis startups.
CannaFundr CannaFundr is an online investment portal connecting companies seeking funding with accredited investors and qualified funds. The minimum investment varies by company.
P2P Loans
When you invest in P2P loans, your acting similar to a bank but instead of one personal funding the entire loan, the loan is crowdfunded amongst many people. When the borrower starts making monthly payments, you will receive a corresponding fraction of the principal and interest payments from the borrower until the loan is paid off.
While it’s possible and a great thing to be able to start investing with as little as $25, in practice you need a lot more than that to get reasonable diversification and returns back. A $25 investment, by itself can be wipe out with a bad loan, but on the other hand, even if the loan is fully paid off, the returns will be small. Nevertheless, you can also build up a diverse and profitable portfolio over time using automated investing options on the platform or just by committing $25 a week.
Upstart Upstart is an online lending marketplace that provides personal loans using non-traditional variables, such as education and employment, to predict creditworthiness. The lending platform leverages artificial intelligence and machine learning to price credit and automate the borrowing process. The minimum investment amount is $100.
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Prosper Prosper is peer-to-peer lending company that allows U.S. residents to lend money to and borrow money from each other through simple unsecured personal loans. The platform connects good-credit borrowers with investors who can choose to fund their loans. You are required to invest a minimum of $25 into each loan you want in your investment portfolio.
Lending Club Lending Club is peer-to-peer lending company that allows investors to invest in crowdfunded personal loans, auto refinancing loans, business loans, and medical financing. The minimum investment is $500.
Marketplace Aggregator
NewChip Newchip marketplace aggregates investment opportunities from a wide range of crowdfunding platforms. Similar to how Kayak and Priceline consolidate flights from numerous airlines into a marketplace, Newchip consolidates investment opportunities from investment platforms around the nation into a single marketplace.
The platform do not directly fund startups nor are transactions completed on Newchip, instead the platform offers investors a one-stop-shop to view and compare startup offerings from over 50+ portal platforms. Investment transactions are completed on our partner portals such as Wefunder, Fundrise, Startengine, Honeycomb, MicroVentures and many others.
Equity Crowdfunding Success Stories Highlights
Now that we are over 5 years since the inception of equity crowdfunding, there's several success stories within the sector and the list is constantly growing. Taking into account that this is a fairly new sector and the average time it takes for an company to exit, the sector is showing some very promising results so far.
Included in the highlights are some companies that were funded via rewards-based crowdfunding, which were mentioned due to the high amount the companies were acquired for and who the acquiring companies are.
CruiseAutomation, probably one of the biggest equity crowdfunding success stories, is a tech company that creates autonomous driving technologies. Launched in 2013 by Twitch founder, Kyle Vogt, the company initially raised funding on the equity crowdfunding platform AngelList, through some of their various funds and syndicates.
In 2016, General Motors acquired the self driving technology firm for $1 Billion in cash and stock, making it crowdfunding's first billion dollar exit.
Oculus VR
Oculus is an American technology company specialized in virtual reality hardware and software products. Its crowdfunding experience has made it a stunning case among technology industry. The Oculus campaign raised more than its US$250,000 funding goal within 24 hours, going on to raise over $2.4 million by the end of its Kickstarter campaign.
In March 2014, Facebook announced its acquisition of Oculus VR for $2.4 billion. Its 9,500 crowdfunding backers received a pair of virtual reality goggles— but no equity stake in the company, as it was a reward based campaign. If Oculus VR was an Equity Crowdfunding campaign investors would have received an estimated 400 times earnings of their initial contribution. A $1,000 investment in Oculus would have yielded a return of $400,000.
Misfit
In 2013, Misfit Wearables was initially planning to launch their campaign for the new Activity Tracker “Shine” on Kickstarter but as they did not receive responses in a timely manner, Misfit decided to launch on Indiegogo and reached the funding goal within 10 hours after being online.
In 2015, Fossil Group acquired Misfit for 260M. This, like the Oculus deal, was a rewards based crowdfunding offering so non of the backers received equity in the company.
Crowdcube, an equity crowdfunding platform based in the UK has seen several companies successfully exit, giving those investors large returns on their investments. The equity crowdfunding platform, only available to UK residents, crowdfunded companies that includes
- E-Car Club, the UK’s first entirely electric car sharing club for businesses and communities, raised £100,000 from 63 investors on Crowdcube in 2013. In what was the first full equity crowdfunded exit, E-Car Club was acquired to Europcar, Europe’s leading car rental and mobility company in 2015. The sale delivered positive returns for investors.
- Camden Town Brewery, one of London’s biggest breweries, raised £2.75m on Crowdcube in 2015, following investment from over 2,100 investors. Just eight months later the company was acquired by AB InBev, the world’s biggest drinks company, delivering investors a multiple return on their investment. The sale delivered positive returns for investors.
- Disruptive global DIY fashion brand Wool and the Gang, which raised funding in 2015, was acquired by BlueGem Capital Partners who have also invested in the likes of Liberty London and Mamas & Papas. The sale in 2016 delivered positive returns for investors.
For more equity crowdfunding success stories, the article below lists more companies that has had successful exits.
Conclusion
The equity crowdfunding sector is one that is going through lots of changes, which is exactly what should be happening for this fairly new sector. New businesses are being started everyday and each of those businesses needs financing, making it a great environment for everyday investors to get in on some of the deals.
The sector is also seeing a slow but steady growth in the number of companies that are making an exit whether it is by IPO, Acquisition, Revenue Share or Share Buy Back programs.
This gives current and future investors confidence that equity crowdfunded investments are worth investing in and with many secondary markets springing up, investors now have a way to sell their investments. As a major fan of equity crowdfunding and with so many things going on in the sector right now, it will be exciting to see what it will eventually evolve into.
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