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You may have heard of crowdfunding or even thought about trying it yourself. Crowdfunding traditionally has been a way for early-stage companies to raise money from supporters, or ‘the crowd’ in exchange for goods or services - anything from t-shirts to early access to a platform product. In the last several years, crowdfunding has evolved to include an option for ‘the crowd’ to support early-stage companies by purchasing a portion of the company itself. This is known as equity crowdfunding.

Equity crowdfunding has become a popular alternative for startups and small businesses to raise capital without giving up a large portion of their ownership to venture capitalists or angel investors. By offering equity or ownership in a company, equity crowdfunding platforms allow founders to raise money from non-accredited investors who believe in their vision and want to see their business succeed.

However, not all equity crowdfunding platforms are created equal. Each platform has its own unique features, investment types, fees, and investor protections, making it important to carefully evaluate each platform before deciding where to raise funds for your business.

In this post, we'll compare some of the most popular equity crowdfunding platforms from a founder's perspective. We'll take a look at the minimum investment required, the fees charged, the types of investments available, the industries covered, and the support and resources offered by each platform. Let's dive in and find the perfect platform to help you fund your business.

When choosing a platform, there are a number of factors to consider before just jumping in.

What type of Raise?

There are two ways to approach equity crowdfunding: Regulation Crowdfunding and Reg A+.

Regulation Crowdfunding allows startups and small businesses to raise up to $5 million per year through crowdfunding from both accredited and non-accredited investors. This regulation has lower filing and disclosure requirements compared to Reg A+ and is therefore more accessible to smaller companies. The offering must be made through an SEC-registered intermediary and there are restrictions on the amount investors can invest based on their income and net worth.

Before even getting into platform fees, it can cost anywhere from $4K-$10K for the required legal, financial and compliance. While these costs may be reduced those reductions do come without trade-offs. Self-certifying financials can help speed up the process and ease upfront costs, but it does cap the amount you can raise at $107K. Typically, these campaigns can be up and running within 4-8 weeks.

Reg A+, on the other hand, allows companies to raise up to $75 million per year through a public offering, with both accredited and non-accredited investors allowed to participate. This regulation has higher filing and disclosure requirements compared to Regulation Crowdfunding, but also allows companies to offer a wider range of securities, including equity, debt, and convertible securities. Reg A+ offerings must also be approved by the SEC and comply with ongoing reporting requirements.

Reg A+ campaigns have considerably higher upfront costs, typically $50K, on the low end, all the way up to $100K+ depending on certain factors. There is no way to reduce costs here, and these campaigns typically take a minimum of 6 months in setup and approval times.

Platform Dynamics & Support

When comparing platforms, founders tend to focus on pricing and fees. Beyond costs, though, it’s very important to know what type of ancillary support platforms provide as well. One of the biggest mistakes founders make when executing a campaign is having an “If you launch it they will come mindset,” which is never the case. These platforms can help to get eyes on your raise in different ways. As a founder, you will want to know:  Do they have playbooks that lay out best practices? Is there a marketing team to help with asset creation? Do they do promotion and help with discoverability or is that all on you? Having a deep understanding of how different platforms operate will help you determine the true opportunity costs of running a campaign.

Here’s a comparison of some of the most popular platforms. 

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