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Top 10 Crowdfunding Sites

| Monday July 16th, 2012 | 32 Comments

For more information, check out our series on the rise of the sharing economy.

Whether he knew it or not, President Obama created a brand new industry when he signed the JOBS act into law on April 5th. Up until now, it’s been illegal for private businesses to offer equity to anyone other than accredited investors in exchange for funding. As a result, crowdfunding sites (like Kickstarter and Indiegogo) and the investment seekers that use them have been restricted to giving gimmicky thank you gifts and pre-selling new products in exchange for donations. Although this method of fundraising has proven successful for many artists, charities, and startups, the payback for the people who are giving away their money has been limited to cheap schwag and a few new toys.

The passing of the JOBS Act is about to change all of that. Once the rules are in place early next year, private businesses and startups will be able to use crowdfunding to give equity to investors who will get an actual monetary return instead of a sticker or T-shirt. This shift is expected to attract a huge influx of capital from regular Joes looking for better ways to invest than what is currently being offered by the stock market or the meager 0.5 percent interest from savings accounts.

Fred Wilson, co-founder of the venture capital firm Union Square Ventures (which has invested in TwitterTumblrFoursquare, and Zynga), predicts that once it gets up and running, the equity crowdfunding market will reach $300 billion and will be largely driven by families and individuals investing a small percentage of their assets via crowdfunding. As a point of comparison, a study from Crowdsourcing.org reports that about $1.5 billion was raised from 452 crowdfunding platforms in 2011.

The opportunity to cash in on this new industry by creating “next generation” equity crowdfunding platforms is substantial. Hungry tech entrepreneurs are scrambling to get out in front of this imminent boon; and the market is poised for saturation. To help you keep track of all the happenings in this space, here is a an overview of ten existing platforms that may be getting into the equity game, as well as the status of the newcomers that have been popping up daily.

Kickstarter

Kickstarter: With more than 63,000 projects and $250 million in pledges raised, Kickstarter has emerged as a leader in the current crowdfunding craze. There has been a lot of buzz about whether they will start helping their users offer equity to investors once the new rules are in place. But in a recent interview with GigaOm, founder Perry Chan stated that Kickstarter is “not interested in that model.”

Indiegogo

Indiegogo: Like Kickstarter, Indiegogo is a popular crowdfunding platform that recently raised $15 million in Series A funding. The company claims that this is the largest funding round of any crowdfunding platform to date. Indiegogo was a supporter of the JOBS Act, and founder Slava Rubin told TechCrunch that the company may very well decide to open up the platform to equity transactions in the future.

Fundable

Fundable: Founded by serial entrepreneur Wil Schroter and just launched in May, Fundable is currently running a rewards-based funding platform while also offering accredited investors the opportunity to invest in small business for equity. Schroter plans to fully open the gates as an equity platform once the new law has been implemented.

Crowdfunder

Crowdfunder: This Los Angeles-based company, which also launched in May, has taken a different approach to waiting out the JOBS Act rules before it can start offering equity through the site. Companies can apply to raise funds and users can vote on those they would invest in without any transactions actually taking place. As of the end of May, nearly 2,000 companies had signed up with crowdfunders pledging $17 million in investments. Crowdfunder is also holding a series of contests in cities around the country where local businesses are judged by a panel of investors and compete for $25,000 in funding. The first event, called Crowdstart LA, took place on May 22nd and elicited over 700 submissions.

EarlyShares

EarlyShares: In an effort to raise awareness about the JOBS Act and educate consumers about its benefits, EarlyShares recently announced a U.S. tour, hitting 24 cities in 24 weeks on a Nationwide Educational Roadshow. The company is also co-sponsoring Techweek Launch, a startup competition that offers one winner up to $100,000 in cash and prizes. Although the company claims to be “the premiere Portal for Equity Based Crowdfunding” they say they can’t list real companies on the site and are only taking pre-registrations.

Once the rules are in place early next year, private businesses and startups will be able to use crowdfunding to give equity to investors who will get an actual monetary return instead of a sticker or T-shirt.

SeedInvest

SeedInvest: Launched by a group of young Wall Street alums getting their MBAs at The Wharton School of the University of Pennsylvania, SeedInvest recently won third place at Philly Startup Weekend 3.0. Founder Ryan Feit said that following their win, he’s had a lot of people from the Philadelphia community reach out to him about investing and is in the process of seeking a round of funding. The site is still in the pre-launch phase but entrepreneurs and business owners can apply for early access.

GetFunded

GetFunded: This shiny new site from Apps Genius Corp popped up just last month and is currently reviewing pre-registrations to be selected for participation in their pre-launch. In an effort to attract “the best possible businesses seeking crowdfunding,” the 25 companies that are chosen will each receive up to $5,000.

RelayFund

RelayFund: A group of venture capitalists, entrepreneurs and investment bankers have teamed up to launch RelayFund, which is the creation of investment banking firm Hartwick Capital and investor relations firm Lambert, Edwards & Associates. According to a press release, the founders view crowdfunding for equity as “the next major catalyst in transforming the capital markets and connecting everyday Americans with private equity.” The press release also calls RelayFund “a leading online community focused on second-generation crowdfunding…” but the site has yet to launch.

WeFunder

WeFunder: Founded in January 2010 by an MIT Sloan School of Management grad and still in pre-launch, WeFunder boasts a community of 6,100 funders pledging more than $16.5 million in investments. According to Mashable, the platform combines traditional startup funding with equity crowdfunding in amounts as low as $100.

CrowdCube

CrowdCube: Equity-based crowdfunding is already legal in the UK, and CrowdCube has been around for a few years already. They’ve raised £2.8 million for 15 companies so far. The company hasn’t announced any plans to expand into the U.S. market but given their experience compared to these new domestic players, they are positioned well to do so.

There are also dozens of platforms targeted at specific niches and industries like CircleUp for consumer goods, GreenUnite for green projects, Appsfunder for mobile apps, and New Jelly for artists.

What other equity crowdfunding platforms are on the horizon? Put it in the comments.

 [Image credit: James Cridland, Flickr]

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Kara Scharwath is a corporate social responsibility professional and marketing consultant. She recently received her MBA in Sustainable Management from Presidio Graduate School and is currently working as a Graduate Associate in Corporate Citizenship at the Walt Disney Company. Follow her on Twitter @karameredith.


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  • http://twitter.com/RoCSpeaks Return on Change

    Return on Change!

  • Fred

    Kara this is a great overview of the landscape, however many of the crowdfunding platforms are startups that are not in operation, have not operated a day in their life, and will not be in operation until the JOBS Act is passed. There are many other platforms out there that exist that are in operation today within the current regulatory environment and will be the leading players when the legislation becomes enacted. These platforms include: Bolstr.com, Circleup.com, Microventures.com, etc.

  • Jofr333

    Why was gofundme.com not mentioned?  I have used this site extensively and from my understanding it is quite large. 

  • http://www.treverimarket.com/ crowdfunding

    I would have to agree w above, some of those top ten are not in operation.

  • http://twitter.com/_CrowdFunding Robert Dobyns

    Conzortia.com FundMyWish.com CrowdfundingKids.com Conzortia.net and HoneymoonPlanners.info to name a few more

  • Narry

    Seems like you missed out quite a few of the big ones… and how can a site be in the top ten if it hasn’t even launched (GetFunded)???

    Here’s a more comphrehensive list of crowdfunding sites: http://www.squidoo.com/crowdfunding-websites

  • Listing Department

    Not certain why the oldest SRO for Crowdfunding www.FIMBRA.org is not mentioned and its hosted Crowdfunding Micro Stock Exchange http://www.FIMBEX.com

  • http://www.facebook.com/jen.boynton Jen Boynton

    Indeed. It looks like we’ll need to do a follow-up! Thanks for all the great additions everyone. 

  • Xtme2005
  • Hsorloff

    For a solid list with reviews and rankings take a look at
    http://www.crowdfunding-website-reviews.com

  • PhillyAdvocate

    http://feedthemuse.net/ Homegrown Philly crowdfunding that predates Kickstarter. Deadlines are an option but not required. And artists receive donations in monthly disbursements on a rolling basis instead of waiting until the end.

  • http://profile.yahoo.com/HX67UPJRFR5K7IDK2X4GNKXSRY Thilina Basnayake

    Great article!

    “For a book on Crowdfunding, please see:The JOBS Act: Crowdfunding for Small Businesses and Startupshttp://www.amazon.com/The-JOBS-Act-Crowdfunding-Businesses/dp/143024755XAlso see our crowdfunding webinar (July 25th and August 2nd).jobsact.eventbrite.comThank you!” 

  • Gabrielle

    Not in the US but active in Europe there is https://www.anaxago.com/en 

  • fundedbyme

    Not to forget FundedByMe.com Northern Europes largest platform also adding Equity crowdfunding from the fall. 
    http://www.fundedbyme.com
    http://www.fundedbyme.com/Equity

    /Daniel

  • margsview

    Quite a bit of this to-be-investors scenario sounds like the tech bubble in the 80`s and we all know how many in retrospect lost then.

  • http://twitter.com/CielexCrowdfund Cielex

    Cielex, a new funding portal, has developed a unique map-based user interface to quickly connect entrepreneurs with investors.  Check us out at: http://www.cielex.com

  • Pedromackness

    ThrillCapital – http://www.thrillcapital.com/ - Sport & Entertainment – Equity and pledge based crowdfunding

  • StartupValley

    Good post Kara! Here’s another one to add to the list. StartupValley is a crowdfund investing platform for the technology sector. It was the first equity crowdfunding portal to start in NJ – http://www.startupvalley.com

  • Shane

    Crowdfunders.us is currently in the development stages and is planned to launch towards the end of the year. Will offer both project based and equity funding.

  • James Bailey

    PleaseFund.Us is a leading UK based crowdfunding platform open to projects all over the world!

  • Christoffer Wallin

    http://www.sprinklebit.com are also allowing the crowd to trade stocks.

  • rags

    Hi kara, You must look at Seedrs, the equity crowdfunding platform in UK. It is going places. Cheers.

  • peter

    uinvest can be include in list

  • John Q. Public

    I think it’s ‘swag’ Kara, not ‘schwag’. Personally, I can always use some new swag (while bought up on schwag since Xmas)>

  • Juan J. Ramirez

    I’m thinking about getting crowdfunding for HotSmart®; the product is on the market and all it needs is to be mass produced. Any opinions? I’m just starting to learn about crowdfunding

  • http://www.facebook.com/profile.php?id=550069552 Gurpreet Sidhu

    http://causewish.com is a pretty big medical crowdfunding site

  • Robert Zani

    Crowdfunding sites seem to be everywhere now a days. I teach my students the ones to look for that will give them the best opportunity for a successful campaign. I just had a class of 100 students and told them to look at http;//www.fundoozled.com and another new platform that I will not mention because they are that bad.

    I teach them to use the new platforms to get the most exposure for their campaigns so they do not get lost in the 60,000 other campaign like on the bigger sites. Another thing that I pointed out to them is fundoozled’s free marketing tools to help them succeed

  • Tom

    So many have launched in the last year with the same exact concept and model it’s hard to call crowdfunding innovative anymore. What I can say is that at http://www.syndicateroom.com you invest alongside experienced business angels. Is is still crowdfunding if you are following an experienced investors lead?

  • http://www.protonenterprises.com/ James Murphy

    Not seeing EquityNet.com? Over 200 Million raised through the platform, been around since 2005. Been using them for a while with our incubator. Richard Branson just quoted them next to Kickstarter. http://www.bdlive.co.za/opinion/columnists/2014/02/17/finding-the-right-path-for-funding

  • rajesh

    please say me the sites which will help to ORPHAN people …..please

  • http://www.fundedflow.com/ fundedflow

    Hi Kara, a good list since it was first published. Since the last 2 years we have seen a new emergence of crowdfunding, and a boom in startups. Covering equity as well as donation and giveback models, for example fundedflow.com covers both models of investment or donation. Others are also emerging in niches such as angel.co and pozible.com

  • Eleanor Head

    Another one to add to the list is Equity Crowdfunding site Eureeca http://eureeca.com/