Over the past few years, a new way of funding ideas and projects has emerged; crowdfunding uses the collective cooperation of a group of people (the “crowd”) to pool resources together in support of a specific project. There are two main crowdfunding models: equity-based crowdfunding where people contribute funds to a business or project in exchange for equity and donation-based crowdfunding where people donate to a project in exchange for tangible, non-monetary, rewards. A relatively new phenomenon, crowdfunding is booming worldwide. Donation-based crowdfunding (sites like KickStarter and IndieGogo) has seen tremendous growth in the past couple of years. Now, equity-based crowdfunding is taking off.
Now, it’s possible for individuals to invest, often along with experienced angel investors. Hunger to aim to invest in the ‘new Facebook’ or ‘new Skype’ is no longer the privilege of venture capital funds, but it’s worth remembering that the mortality of startups is high and investing is thus very risky. Despite this, new crowdfunding platforms are emerging, some with ambitions to become pan-European hubs, connecting startups with smart money.
I personally help startups get funded and also work with top crowdfunding platforms and angel investors active there. For this reason, I’ve put together a short list of a few active equity crowdfunding campaigns that I liked in February. (Warning: This is not an investment recommendation, make your own judgement before/if you invest).
Top US platform AngelList just launched in the UK, led by the great Philipp Moehring. Before AngelList, Philipp worked for Seedcamp, one of the top European business accelerators. With AngelList you can now invest, for instance, in Seedcamp’s £20 million pre-seed and seed venture acceleration fund. Seedcamp has made over 130 investments to date, 80%+ of which have raised follow-on funding to the tune of +£150 million. Its track record includes successful exits (Grabcad, Ubervu, RentMineOnline, 7 others) and highly disruptive investments (Transferwise, Farmeron, EDITD, Brandid, Frontback, Traity, myBuilder, 120+ others). Philipp aims to find good angel investors who will invite other investors to co-invest with them.
Companisto, a leading portal in Germany, has launched a campaign for EBS Technologies, NEXT WAVE™ system, a unique neurological stimulation system for the treatment of neurologically-based visual impairments. EBS technology serves the needs of as many as two markets: ophthalmology (with the very important medical indication of glaucoma) and neurology (with the also very important medical indication of stroke). Investors like Earlybird, the leading German VC, have so far also invested.
OurCrowd, one of my favorite platforms, is opening the door to great early-stage deals in Israel, with some European spices thrown into the mix, too. Each year in Israel there are 500+ venture finance investments and over 1000+ angel investments. Deal flow continues to rise and there is huge pent up and growing demand among Israelis and foreigners to participate in Israel’s ‘StartUp Nation’ culture – and not just through investing in public stocks or mutual funds. OurCrowd offers the option to invest in startups like AutoLap or Borro, often with experienced investors and/or mentors (Update – July 2023: The website seems to be out of use, and we therefore deactivated the original link).
Invesdor is the leading platform in Scandinavia, planning to expand to Europe under the mifid licence. Here is a list of current crowdfunding campaigns and here is my recent interview with Invesdor’s CEO (Update – July 2023: The website seems to be out of use, and we therefore deactivated the original link). Recently, Invesdor agreed to cooperate with the business angel network FiBAN, which is a good deal for all, in my view. “For us, the most important thing is to create reliable operating methods for the markets of early-stage companies both in terms of business angel investments, crowdfunding and other means of financing,” commented CEO of FiBAN Jan D. Oker-Blom (Update – July 2023: The article seems to be down, and we therefore deactivated the original link).
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