Top Equity Crowdfunding Platforms (Reg CF)

Moe Lueker
15 Oct 202205:46
EducationalLearning
32 Likes 10 Comments

TLDRThis video script offers a comprehensive guide to the top equity crowdfunding platforms, focusing on Refunder, Start Engine, and Republic. It highlights the importance of choosing the right platform for investing or raising capital, analyzing factors like investor fees, deal quality, and security types. The script reveals that these three platforms account for 90% of capital raised in 2022, providing insights into their unique advantages and ideal investor profiles. It also emphasizes the need for due diligence and risk awareness in startup investments.

Takeaways
  • 💡 Equity crowdfunding allows regular investors to buy securities in private companies, often with a minimum investment as low as $100.
  • 🔍 The script analyzed nine different platforms and focused on the top three based on various factors including the number of campaigns and capital raised.
  • 📈 Three platforms—WeFunder, StartEngine, and Republic—account for 90% of capital raised through equity crowdfunding in 2022.
  • 🏆 WeFunder had the most campaigns and the highest dollar amount raised in 2022, followed by StartEngine and Republic.
  • 👥 V funder and Republic have the largest investor bases, with around 30,000 investors each, making up 70% of the investor pool.
  • 💰 Republic stands out with the highest average campaign dollar raised, at over $600,000 per campaign, compared to other platforms' $300,000 or less.
  • 🤔 Investors should consider the types of companies and deals, quality and quantity of deals, investor fees, due diligence, and types of securities offered when choosing a platform.
  • 🚀 WeFunder is suitable for experienced investors who can do their own due diligence due to its large selection of startups.
  • 🌱 StartEngine is also good for experienced investors but has a smaller selection of startups compared to WeFunder.
  • 🛡️ Republic is ideal for investors who prefer less due diligence as it pre-screens companies, offering a curated list of opportunities.
  • ⚠️ The video emphasizes the importance of doing one's own due diligence and not investing more than one can afford to lose due to the inherent risks in startup investing.
Q & A

  • What is the main topic of the video script?

    -The main topic of the video script is about equity crowdfunding platforms, focusing on how to choose the right one for investing or raising capital, and providing insights into the top platforms based on various factors.

  • What is equity crowdfunding?

    -Equity crowdfunding is the online offering of a private company's securities to regular investors, allowing them to invest with as little as one hundred dollars.

  • How many equity crowdfunding platforms were analyzed in the script?

    -Nine equity crowdfunding platforms were analyzed in the script.

  • What factors were considered when evaluating the equity crowdfunding platforms?

    -Factors considered include the number of campaigns, the amount of money raised, types of companies and deals, investor fees, due diligence, deal curation, types of securities offered, secondary market options, and payment forms accepted.

  • Which three platforms account for 90% of capital raised in 2022 according to the script?

    -The three platforms that account for 90% of capital raised in 2022 are WeFunder, StartEngine, and Republic.

  • What does the script suggest about the investor base of the top platforms?

    -The script suggests that WeFunder and Republic have the largest active investor base, with around 30,000 investors making up about 70% of the investor pool, while StartEngine has around 8,000 investors or about 11% of all investors in 2022.

  • Why is Republic highlighted as a platform for established companies raising larger rounds?

    -Republic is highlighted for established companies because it has the largest campaign size, raising over six hundred thousand dollars per campaign, and it performs curation and due diligence on the companies it lists.

  • What is the average check size among most of the platforms mentioned in the script?

    -The average check size among most of the platforms mentioned in the script is around 1,000 to 1,500 dollars per person.

  • What does the script suggest for investors who can do their own due diligence?

    -The script suggests that WeFunder is great for investors who can do their own due diligence, due to its large selection of startups raising money.

  • What is the script's advice for startups considering raising money through equity crowdfunding?

    -The script advises startups to consider WeFunder for its large and active investor base or Republic for established companies looking to raise larger rounds.

  • How can viewers access the Excel spreadsheet mentioned in the script?

    -Viewers can access the Excel spreadsheet by liking the video, commenting below, and subscribing for more equity crowdfunding tips and company reviews.

Outlines
00:00
💼 Equity Crowdfunding Platforms Overview

This paragraph introduces the concept of equity crowdfunding, emphasizing the importance of selecting the right platform for investing or raising capital. The speaker discusses their analysis of nine top equity crowdfunding platforms, focusing on factors such as the number of campaigns, the amount of capital raised, and the types of securities offered. The goal is to help viewers make informed investment decisions by presenting the top three platforms that account for 90% of capital raised in 2022. The paragraph also outlines the criteria for evaluating a funding portal, including the types of companies and deals, investor fees, due diligence practices, and secondary market options.

05:00
📊 Comparative Analysis of Top Crowdfunding Platforms

The second paragraph delves into a comparative analysis of the top three crowdfunding platforms identified in the analysis: WeFunder, Start Engine, and Republic. It provides data on the number of campaigns, the total dollar amount raised, and the average check size per investor. The paragraph highlights the strengths of each platform, such as WeFunder's large selection and active investor base, Start Engine's curated approach for experienced investors, and Republic's focus on pre-screened, high-quality deals with larger campaign sizes. The speaker also discusses the suitability of each platform for different types of investors and companies, and the importance of doing one's own due diligence before investing.

Mindmap
Keywords
💡Equity crowdfunding
Equity crowdfunding refers to the process where a private company raises capital by offering securities to regular investors online, often with a minimum investment amount as low as $100. In the video's context, it is the central theme, as the script discusses the importance of choosing the right platform for this type of fundraising and investing.
💡Investment decision
An investment decision is a choice made by an investor regarding the allocation of funds into a particular investment opportunity. The video emphasizes the significance of making informed decisions when investing in startups through equity crowdfunding platforms.
💡Platform
In the context of the video, a platform refers to an online service that facilitates equity crowdfunding by connecting startups with potential investors. The script mentions analyzing various platforms to determine the best ones for raising capital and investing.
💡Capital raised
Capital raised refers to the total amount of money that has been invested in a company or through a platform. The video script provides statistics on the amount of capital raised on different equity crowdfunding platforms, highlighting the success of the top three platforms.
💡Regulation CF
Regulation CF is a set of rules by the U.S. Securities and Exchange Commission that allows companies to raise money through small-dollar investments from the general public. The script mentions 'Rec CF' which likely refers to Regulation CF, indicating the type of securities being offered in the crowdfunding process.
💡Investor fees
Investor fees are charges that platforms may impose on investors for using their services. The video script suggests that understanding investor fees is an important factor when evaluating equity crowdfunding platforms.
💡Due diligence
Due diligence is the research and analysis conducted to evaluate an investment's risks and potential returns. The script discusses the importance of due diligence in the context of evaluating startups on equity crowdfunding platforms.
💡Deal curation
Deal curation refers to the process of selecting and presenting investment opportunities on a platform. The video mentions that some platforms perform due diligence and deal curation, which can affect the quality of the deals available to investors.
💡Securities
Securities in the context of the video are financial instruments representing ownership in a company, such as common stock or SAFEs (Simple Agreement for Future Equity). The script advises investors to consider the types of securities offered by crowdfunding platforms.
💡Secondary market
A secondary market is where securities that have been issued are traded between investors. The video script mentions secondary market options as a factor for increased liquidity, which is important for investors looking to sell their investments.
💡Average check size
Average check size refers to the mean amount invested by an individual investor in a particular platform or campaign. The script uses this metric to compare the investment behavior across different equity crowdfunding platforms.
💡Investor base
Investor base refers to the community or pool of investors using a particular platform. The video script discusses the size of the investor base on various platforms, which can influence the success of capital raising campaigns.
💡Campaign
A campaign in the context of equity crowdfunding is a fundraising initiative by a startup on a crowdfunding platform. The video script analyzes the number of campaigns and the amount of capital raised per campaign on different platforms.
💡Due diligence
The term 'due diligence' is mentioned again in the context of how some platforms pre-screen companies, reducing the due diligence burden on investors. This is particularly relevant for investors who prefer a more curated selection of investment opportunities.
💡Risk
Risk in investing refers to the potential for loss or return below expectations. The video script concludes with a cautionary note about the inherent risks of investing in startups and the importance of only investing what one can afford to lose.
Highlights

Choosing the right equity crowdfunding platform is crucial for both investors and startups.

Equity crowdfunding allows regular investors to buy securities in private companies starting from as little as a hundred dollars.

The top three platforms account for 90% of capital raised in 2022.

Investors should consider the types of companies and deals, quality and quantity of deals, investor fees, due diligence, and types of securities offered.

Secondary market options and payment forms accepted are also important factors for investors.

WeFunder, Start Engine, and Republic are the top three equity crowdfunding platforms.

WeFunder had the most campaigns and the highest dollar amount raised in 2022.

Start Engine and Republic follow WeFunder in terms of capital raised and campaigns.

The average check size is similar across most platforms, except for Small Change which has a significantly higher average.

WeFunder and Republic have the largest active investor base.

Republic stands out with the highest average campaign dollar raised.

WeFunder is suitable for experienced investors who prefer a wide selection.

Start Engine is a good choice for those with prior startup investment experience.

Republic is ideal for investors who prefer pre-screened companies with higher quality but fewer deals.

Investors should not limit themselves to a single platform and should do their own due diligence.

Startups raising money should consider WeFunder for a large investor base or Republic for larger funding rounds.

An Excel spreadsheet summarizing the data from top crowdfunding platforms is available for interested viewers.

The video provides a detailed comparison and reasons why these platforms are the best for certain types of investors and startups.

Transcripts

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Equity CrowdfundingInvestment PlatformsCapital RaisingStartup FundingInvestment TipsDue DiligenceInvestor BaseFunding PortalsStartup DealsInvestment Analysis