Equity crowdfunding is a relatively new way to raise capital or invest in young companies, often along with the support of experienced angel investors. Given that this method is growing in popularity, I’ve pulled together some of the campaigns that I liked in April. (Warning: This is not a recommendation for investment – make your own judgement before/if you invest).
Emerging Crowd is a new UK-based platform, that takes crowdfunding to emerging markets, starting with Africa (Update – July 2023: The startup seems to be no longer in business under this website, and we therefore deactivated the original link). This is very ambitious, considering how important due diligence is when you invest in the emerging world. Will and Lucien, the co-founders of Emerging Crowd have had long experience with investments in emerging parts of the world. “Our platform’s key objective is to link investors with carefully selected equity and debt investment opportunities in fast-growing frontier and emerging markets. Our primary focus is around consumer services, consumer goods, financial technology and renewables. All of the businesses need to demonstrate solid financial and reputational backgrounds, a proven track record, strong management teams, and good liquidity prospects,” explain the co-founders. The first two companies to launch on the platform are Bozza (the download and streaming platform bringing African multimedia content to a global audience) and Neo (a Nigerian coffee shop chain dubbed “the African Starbucks”).
The leading UK platform Seedrs is currently hosting a niche project from Portugal. AGROOP is a SaaS platform aimed at the farming sector. Currently many of the shortcomings observed in the farming sector are due to the lack of a universal tool that allows farmers to manage their activities in an integrated, collaborative and informed way. For 5% of equity offered, €75K is sought in return. An interesting project and strong team, but scaling things up might be a challenge.
Ever wondered why you can’t manage all your utilities, insurance, mortgage, warranties and other paperwork, electronically in one place? Well, NoMoreFiling have wondered the same thing! This is also a great team who are being hosted on Seedrs.
BIScience is a business intelligence solution provider that helps companies track the online marketing activities of their competitors (Update – July 2023: The startup seems to be no longer in business under this website, and we therefore deactivated the original link). Media buyers, sales managers, affiliates such as online media and advertising professionals can use BIScience to better adapt their marketing strategies to the competitive landscape. Around 15–30% of advertising costs are wasted on learning and researching. Because they know what works for the relative competitors and best-in-class companies, BIScience is able to reduce said costs by 50%. You would be investing along with Cyhawk VC from Israel on iAngels, a new equity crowndfunding platform, which was recently backed by Russian billionaire and Chelsea FC owner Roman Abramovich. iAngels is an equity crowdfunding platform that gives accredited investors the opportunity to become angels in their own right by investing in technology startups alongside top tier angel investors in Israel, while also watching opportunities in Europe.
On that note, here is a list of top crowdfunding platforms in Europe (Update – July 2023: The website seems to be out of use, and we therefore deactivated the original link). Some new platforms are emerging, and I expect that only a few will survive. In general, I believe more in platforms where you can invest along with an experienced lead investors. See my interview with the CEO of Invesdor, the leading platform in Scandinavia , which recently teamed up with FIBAN, the association of angel investors in Finland.
Recently, the US Securities and Exchange Commission (SEC) announced changes that would make crowdfunding more attractive both to startups and investors. The SEC has ruled that early stage startup companies could now raise up to $20 million through equity-based crowdfunding with only ‘reviewed’ financial statements and minimal government compliance. The investments are newly open also to unaccredited investors (SEC Democratizes Equity Crowdfunding With JOBS Act)
Background info: 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 also taking off.
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