Best Fundraising Websites for Equity Financing
1. AngelList
Thanks to Shark Tank, the phrase ‘angel investor’ probably brings to mind images of suited individuals nursing stacks of cash in plush leather chairs. But on AngelList, you’re as likely to be approached by a twentysomething tech tycoon as a more traditional venture capitalist.
AngelList helps you connect with investors in all industries from the comfort of your own couch. CEO and co-founder Naval Ravikant was an early investor in Uber and Twitter, so he knows a thing or two about early-stage business growth. Since 2014, the platform has enabled investors to form mini venture capital funds, making it easier for businesses they’re invested in to raise funds.
2. Crowdfunder
Crowdfunder markets itself as an equity crowdfunding solution for “high-impact ventures”. What that means in plain terms is high monthly fees - subscriptions start from $449/month - for access to elite accredited investors.
While that might appear to be too pricey for most small businesses, you do keep 100% of the actual funds raised. So, if you’re confident enough to put your money where your mouth is, fundraising on Crowdfunder can be cheaper than on a platform with uncapped fees like Kickstarter or IndieGoGo. If your startup has high growth potential, you’re sure to find someone on Crowdfunder who’ll take it to the next level.
3. CircleUp
CircleUp is exclusively for consumer brands and retail businesses with a track record of strong financial performance. They’re quite picky about who can join, though, accepting just a small percentage of companies that apply to be listed on the platform. Most successful applications come from firms earning upwards of $500,000 in annual revenue, so the threshold is high to say the least.
For investors, CircleUp’s appeal lies in the advanced AI software that sifts through the most promising companies to assist their investment decisions. If you think you’ve created the next smash hit Bug-A-Salt children’s toy or Meat Soap novelty gift and want to scale up, CircleUp’s a great place to attract investors who know how to help.
4. EquityNet
EquityNet is the most accessible equity financing platform. Creating a company listing is free, as is making a business plan and viewing investor profiles. You will need a subscription to actually woo investors, but the $100-$200 this costs is a drop in the ocean compared to what you get in return; namely, access to 4,000+ high-net-worth individuals from every industry under the Sun.
The only downside - and it’s a big one - is that the platform takes a very hands-off approach to fraud prevention. They state this clearly in their terms and conditions, but it should give you pause for thought, especially if EquityNet is your first foray into crowdfunding.
5. SeedInvest
A favorite among tech startups, SeedInvest facilitates tons of successful business crowdfunding campaigns. They only accept ~1% of applicants mind you, but they’re quite relaxed about things like annual revenue and financial history - all you need is a prototype of your product or service and at least two full-time team members.
Where SeedInvest stands out is in allowing ‘non-accredited investors’ (read: regular folks) to use the platform. Essentially this means any Warren Buffet wannabe with $100 can buy into your business, giving you the broadest potential investor base of any equity financing platform. If that sounds good, and you can live with the fact that not all your backers will be Harvard Business School grads, SeedInvest is definitely worth a look.
Best Fundraising Websites for Equipment and Inventory Financing
Even the most low-cost VoIP phones and reasonably-priced point-of-sale systemsrepresent a big spend for small businesses. When you’re not even paying yourself a salary, where on earth do you get the cash for these essential purchases?
Enter equipment and inventory financing. The concept is simple: backers fund your new equipment purchase upfront, in exchange for interest on the principal (the amount borrowed) or an agreed share of your profits from future sales.
1. Kickfurther
“If I have seen further, it is by standing on the shoulders of Kickfurther backers” - Isaac Newton
Okay, Newton didn’t actually say that, but he probably would have if he’d used Kickfurther to buy his lab equipment. This clever crowdfunding site connects companies with a community of investors to help pay for purchases.
You don’t need a subscription to use Kickfurther, and they don’t take a cut from funds raised, but backers foot a 1.5% charge on withdrawals to their bank accounts. All sorts of businesses use it, from chic boutiques to comic book stores, and investors report positive experiences all around. And Kickfurther itself is going from strength to strength, so it’s a win-win-win.
2. Currency Capital
Currency Capital brokers small businesses equipment loans* and leases. Terms vary by lender/investor, but there are certain criteria all companies must meet when they first register to use the platform. Businesses with sub-585 credit scores and less than $75,000 annual revenue need not apply (it’s definitely one of the more lender-friendly fundraising websites on this list). All that being said, Currency Capital offers the most choice of equipment financing options.
*We have to caveat our endorsement of Currency Capital by pointing out that most of their equipment loans have extortionate interest rates of between 6% and 24%. For context, a typical small business loan rate is between 4% and 6%. To avoid being ripped off, you’re better off cutting out the middleman and requesting quotes from small business loan providers.
▶ Now read: The Ultimate Guide to Small Business Loans
3. Balboa Capital
We’ll spare you the Rocky jokes, except to say that Balboa Capital is the pound-for-pound champ for flexible equipment financing. They offer loans of from as little as $5,000 at a wider range of interest rates than other online lenders.
Because they’re a direct lender (not a brokerage platform), they do have stricter eligibility criteria than Kickfurther or Currency Capital. If you’ve been in business for 3-7 years and have a minimum credit score of 650, you can apply for an equipment loan/lease of up to $500,000. They also run a special program to help startups qualify for smaller loans of up to $25,000. All in all, there’s more to this lender than first meets the eye (of the tiger).
4. eLease
eLease can help you pay for just about anything - restaurant POS terminals, hotel phone systems, your slot machine habit. Actually, we’re not so sure about that last one. Well, perhaps if you’re a casino owner and you can show how buying slot machines fits within your business model. Ah wait, according to Google, commercial loans for state-sanctioned gambling are tightly-regulated. In that case, eLease probably can’t help you.
But to be clear, they definitely CAN help with low-interest loans on phones, POS systems and lots of other useful things.
5. Lending Club
Lending Club pioneered peer-to-peer lending in the US. For small businesses, borrowing is as easy as filling out a short form with a few basic details (time in business, credit score, revenue, etc) and waiting for approval. You can receive funding in as little as two days (great for restaurants and retailers in a hurry to restock), and interest rates compare very favorably with those for bank loans.
Lending Club takes its cut from the amount you borrow, so be sure to factor that into your decision about how much to apply for.
Best Fundraising Websites for Launching Products and Services
For every amazing product on store shelves, there are a thousand equally-good ones that never made it past the prototype. The reason? Their creators didn’t have the funds, or the platform to promote them on.
These crowdfunding websites are purpose-built to help entrepreneurs share their product ideas with the world. Unlike most of the best fundraising websites we’ve already looked at, you don’t have to have a business to use them; just an idea for one will do.
1. Kickstarter
Nine years after launch and with nearly $2 billion in total funding provided, the platform that made crowdfunding cool is still going strong. As we’ve already seen, Kickstarter is home to an eclectic mix of serious and non-so-serious projects that anyone can back. Pledges are reward-based, and as a project owner you have complete control over the rewards you offer backers and how much you ask for.
It’s all or nothing though; if you don’t hit your overall funding target within an allotted time, you don’t get to keep any of the money raised. Word to the wise: Kickstarter campaigns that feature videos are 85% more likely to succeed.
2. Indiegogo
Kickstarter’s slightly trendier cousin is also slightly older (March 2008). It’s a hub for early-stage tech startups that don’t yet have the clout to pitch to VC or private equity investors. Fortunately, Indiegogo backers are a generous bunch, investing/donating more than $1.5 billion in total project funding to date. Functionality-wise, Indiegogo is similar to Kickstarter, but with one big difference; you get to keep any funds raised regardless of whether or not you hit your funding target. Fantastic for idea-owners, less-so for backers.
3. PieShell
PieShell is the least well-established fundraising platform on this list, but also one of the most important. Founder Cheryl Clements came up with the idea for a fundraising site specifically for food and drink products when she discovered that just a quarter of these projects find success via traditional crowdfunding. In just a few short months, PieShell has helped more than a baker’s dozen restaurants and retailers realize their dreams.
Incidentally, if selling quiche is your niche, don’t fret: PieShell doesn’t discriminate against purveyors of open-crust pastries. Pizza, on the other hand, is a whole other can of worms*...
4. RocketHub
RocketHub will send your bank balance to the Moon with its amazing social media integrations. Once you’ve created your campaign page from one of RocketHub’s templates, you can schedule Facebook and Twitter posts to update your friends about key project milestones and invite their contributions.
Similarly to Indiegogo, you don’t have to hit a predefined funding target to keep people’s pledges. You do, however, have to pay a 4% fee on funds collected.
5. Fundable
Fundable is the only fundraising website to offer both rewards-based and equity-based fundraising. The choice is welcome; what isn’t so great is the flat fee of $179/month that penalizes unsuccessful campaigners.
You also don’t get to keep any funds if your miss your target, so it’s one of the tougher platforms to succeed on. On the plus side, Fundable’s team works tirelessly to provide hands-on support to help users navigate the fundraising process.
Best Fundraising Websites Recapped
Jay-Z expressed every small business owner’s feelings about fundraising on Diamonds From Sierra Leone:
I'm not a businessman; I'm a business, man! Let me handle my business, damn
We hear you Hov; and so do all the fundraising companies featured here. Business fundraising in any industry is a grind. If Expert Market ever gets around to launching that Kickstarter we’ve talked about for a robotic fundraising assistant called Moneytron 3000, maybe one day it will care of itself. Until then, forget bank loans - the best fundraising websites can help you and Jay-Z do what you do best: handle your business.
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