Whether you're a potential investor, or a business looking for equity, there's many different platforms out there to consider using.
We've taken a look at the best equity crowdfunding platforms available for Australians. After much deliberation and market research these are our top picks to consider using.
Like any financial website, you should do your own research or seek professional assistance.
Venture Crowd is an Australian equity based crowdfunding platform allowing groups of investors to take equity in startups and property developments, in exchange for a cash investment.
Venture Crowd was founded in Sydney in 2013 by the alternative asset management company Artesian and has since raised over A$20 million.
For companies to raise money they must first have a professional lead investor, with any funds raised being on the same economic terms as the lead investor.
Once accepted to raise on the platform, Venturecrowd provides all of the legal documentation as well as a dedicated campaign manager. A funding round typically lasts for 6 weeks with an average investment size of A$35,000.
VentureCrowd charges 6% of any funds raised as well as a A$7500 campaign fee. VentureCrowd is open to accredited investors who have net assets of over A$2.5 million or a gross income of over A$250,000.
All deals available on the platform first go through a rigorous curation and due diligence process before being listed. Investors receive a return on exit, usually when the company or property is sold, or when the company completes an IPO.
Current investment opportunities include mezzanine financing for a townhouse development in ACT, equity in an intelligent cookware company and a coconut water brand.
Equitise is an online equity crowdfunding platform that lets small investors invest in innovative and potentially high growth early stage companies, receiving shares in the company in return.
Investing on Equitise is open to anybody over 18 years of age.
After setting up an investor profile, users can access the platform and browse the latest opportunities and invest from as little as $50.
After the capital raising has ended users become a shareholder in the business, and when the business is later sold or floated on the stock exchange have the option of selling their shares to realise a return.
The platform is free to sign up to and doesn’t charge investors any legal or admin fees for investing.
Companies can raise seed funding or later stage funding in rounds starting at $500,000.
After submitting a campaign, Equitise carries out a due diligence process before publicly launching the campaign. Each fundraising lasts for 60 days and must hit its fundraising target to receive the investment.
Equitise charges businesses an onboarding fee of between A$5000 – A$10,000 and 7.5% of total funds raised.
Companies that have successfully raised funds include health food business Food to Nourish, peer to peer car sharing company car next door and SOFI Spritz, a cocktail company.
Pledge Me is a New Zealand based project and equity crowdfunding platform. It was founded in 2012 and so far, has raised over $45 million through 1500 campaigns.
Successful campaigns that have been run on PledgeMe include Parrortdog, a craft brewery which raised $3 million from over 1000 investors and Ethique, a natural beauty product company which raised $700,000.
PledgeMe is focused on helping companies and projects to raise funds from their existing network of friends, families and supporters rather than finding new investors looking purely for a financial return.
After submitting a campaign proposal, companies go through CrowdfundingU, a six session programme designed to help businesses build and plan a successful campaign.
To participate in CrowdfundingU, PledgeMe charges $3000 for larger campaigns and $1500 for campaigns looking to raise less than $100,000. PledgeMe also takes a 6% success fee of the total amount raised.
Campaigns must set a minimum fundraising target and will only be successful and receive the investment if they meet that target.
PledgeMe doesn’t charge investors any fees when they pledge to a campaign. After signing up and creating an investor profile and verifying their identity, users can browse live campaigns and decide which campaign they would like to support and how many shares they would like to buy.
Birchal is an equity and reward crowdfunding platform for consumer brands and companies.
Birchal is focused exclusively on consumer brands as they believe crowdfunding allows brands to create a community of invested stakeholders and loyal customers, helping them grow beyond the initial investment.
For brands looking to raise money there is a six-stage process. After confirming their eligibility, companies create a pitch using Birchals onboarding tools before launching an Expression of Interest Campaign.
This is a short campaign to collect the details of potential investors and validate there is enough interest. If there is, companies create a compliant Offer Document before a public launch of the campaign which will typically run for 4 – 10 weeks.
If campaigns reach 100% of their target during this time, Birchal will settle all of the payments and issue share certificates before transferring the funds. Birchal charges A$1990 for administration, setup and background checks and a success fee of 6% of the total funds raised.
There is no fee for investors who can investment from a minimum of A$50.
Companies that have successfully raised money through Birchal include Shebah, a female rideshare service which raised A$3 million in Australia’s largest crowdfunding, GiggedIN, a live music subscription service and hospitality group Speakeasy.
Crowdfunding.com is an online crowdfunding platform allowing companies to raise money from a large number of people to fund a project or idea.
There are four main models of crowdfunding offered by crowdfunding.com. Donation based crowdfunding is when a contributor makes a payment, or donation, to a project without receiving anything in return.
Reward based crowdfunding is when companies or projects provide a reward to contributors in return for their investment such as certain goods or services.
Debt based crowdfunding is when rather than receiving shares in a company, investors provide money in exchange for an interest payment and the return of the initial investment.
Equity crowdfunding is when investors provide money in exchange for shares in a company which can be sold at a later date.
Companies currently available to invest in on crowdfunding.com include Konvo, a social ecommerce platform. Konvo have a fundraising target of $500,000 and so far has raised over $120,000.
There is a minimum investment of $125 and retail investors can invest a maximum $10,000, whilst there is no limit for wholesale investors. Konvo are offering between 2 and 20% equity in the business in return.
Crowdfunding.com.au will charge a success fee of 7% if the target amount is reached.
How Crowdfunding Platforms Make Money?
The platform usually charges a setup or campaign fee plus a commission on every investment, or a total of the amount raised. This might be around 5-10% depending on the platform.
Many people say the most lucrative position is the person or company that owns the platform.
Different platforms have different levels of investment minimums, some are $50 while others might be $10,000. This can add up to a lot of commissions, very quickly indeed.
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