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Top 7 Equity Crowdfunding Platforms For Businesses & Entrepreneurs


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 StepsWefunder Best for regulation crowdfundingVisit Site Read MoreEquityNet Best for entrepreneurs & small private businessesVisit Site Read MoreCrowdfunder Best for tech & finance companiesVisit Site Read MoreFundable Best for flexible crowdfunding optionsVisit Site Read MoreAngelListBest for crowdfunding with no monthly feesVisit Site Read More

Other Featured Options:

  • SeedInvest: Best for startups with high growth potential

  • MicroVentures: Best for businesses with a unique idea

Read more below to learn why we chose these options.



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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.

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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 s