Crowdfunding has become a mature investment option for European startups that provides low barrier access to capital. Equity crowdfunding also presents the opportunities for small time investors to gain ownership in high growth startups.
Despite the lack of a coherent legal framework across Europe a number of platforms have established themselves as crowdfunding champions for business investments in recent years.
Crowdcube is Britain’s largest and the world’s first equity crowdfunding platform, targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. More than £26 million have been successfully invested through Crowdcube so far. In February 2014, Crowdcube launched the ‘Crowdcube Venture Fund – that allows investors to crowdfund startups with the extra reassurance that their money is invested, managed and monitored by an independent professional fund manager.
Funding Circle /UK/
Funding Circle is the leader in the peer-to-peer marketplace that can help businesses access fast and simple finance, whilst investors have the potential to earn better returns by lending to them. It directly connects people and organisations who want to lend, with vetted, credit worthy established businesses who want to borrow, thus eliminating traditional banking. Through Funding Circle, businesses can pick the lowest interest rate offers, borrow from many investors and make monthly repayments. More than £285 million have been lent via Funding Circle so far.
FundedByMe was founded in Stockholm, Sweden, in March 2011 and is one of the first crowdfunding platforms in the world to offer both reward-based and equity crowdfunding. The platform has a major focus on European entrepreneurs to facilitate cross-border investments that benefit both entrepreneurs and investors to assist with job creation and economic growth. FundedByMe operates on a global scale and has offices in Sweden, Finland, Denmark, Norway, Spain, Germany, Italy, Singapore. While its reward based orderings are available across the world, equity crowdfunding is available only in Europe and loan-based options are currently available in Germany.
MyMicroInvest (MMI) has a 12,500 member strong community that enables individuals to invest in innovative companies from 50€ upwards. MMI allows you to participate in successful ventures of your choice and has a unique transaction model. Once a project meets its funding goal through MMI, the crowd funded amount is invested in the said company as a single entity and the investors receive a participation note. At the time of exit, the gains are distributed to the crowd per the prorated share of each investor.
Symbid is all about investing safely in new, promising, fast-growing businesses with as little as €20. Symbid allows investors to seamlessly become co-owners with a complete legal structure within which the new financers are bundled. As a result, startups only have to deal with one shareholder cooperative that bundles all the shareholders together. Some unique features of the Symbid community include 1) an ‘Inner Circle’ of involved investors who in turn can support the startup with tips, ideas and comments and 2) the ability to run small private raises or large social-media campaigns.
Companisto is among the leading equity-based crowdfunding platforms in Europe with several renowned business angels, corporate finance specialists, and venture capital companies in its network. The platform allows offer several methods of payment that are available internationally, e.g., credit card payment, instant money transfer, and bank transfer (advance payment), so investors can be worldwide. Investors may invest in innovative start-ups with investments upwards of €5. The platform has successfully funded 30 startups and invested nearly €6 million so far.
7/ Seedrs, UK
Seedrs is focussed on providing a simple way to discover and invest in startups. Over the last six months Seedrs has averaged over £1m invested in successfully funded campaigns. They carry out the legal due diligence on every business that is looking to raise money, so investors are assured and can invest upwards of £10. The Seedrs platform even ensures post investment communications from startups to investors.