5 Best Crowdfunding Websites to Raise Capital for Your Startup

One of the best methods of raising capital for a start-up is through equity crowdfunding. Entrepreneurs benefit from crowdfunding by having access to capital that they may not be able to secure through traditional funding sources, such as bank loans or venture capital.

Crowdfunding allows entrepreneurs to raise small amounts of money from a large pool of investors, which may add up to a significant amount of funding. It also offers instant market validation, by presenting the idea to a large audience and seeing how many people are willing to contribute, entrepreneurs can gauge the level of interest in their business.

It also enables entrepreneurs to engage with backers and receive constructive feedback on their business concept, this feedback if used correctly can lead to product or service improvements.

Lastly, crowdfunding allows entrepreneurs to set their own fundraising goals and timelines, giving them more control over the fundraising process.

Below are the 5 best equity crowdfunding platforms for raising capital for your start-up. These are based on the size of the investor community, number of successful exits for investors and entrepreneurs, and the underlying reputation of the platform.

1.  WeFunder

Launched in 2012, WeFunder came out of the Y Combinator accelerator program, which is the most famous and successful accelerator program in the world. Some success stories from here include AirBNB, Coinbase, DropBox, Stripe, etc.

The reason this is important is that Y Combinator companies support each other in what is a giant ecosystem. Many of the start-ups on WeFunder are Y Combinator graduates (such as Zenefits).

In April 2013, Zenefits raised at a $9M valuation, and only 2 years later in May 2015 they raised an additional $500M and were valued at $4.5B.  These are the type of success stories that are rare on crowdfunding sites. Future fundraising rounds, and exits from previously listed companies is what you should consider important on a platform – As hopefully crowdfunding will just be the stepping stone towards a Series A, and beyond.

The team at WeFunder were responsible for helping to write the JOBS Act, which allows companies to access funding in ways that were not allowed before due to securities regulations. To top this off they are one of the oldest companies in the crowdfunding space and the success they have had illustrates this.

These are some of those success stories:

• Hops & Grain Brewing: Hops & Grain Brewing raised $1 million on WeFunder in 2018 and was later acquired by San Antonio-based craft brewery, Big Hops.
• Beta Bionics: Beta Bionics raised over $1 million on WeFunder in 2016 and went on to raise additional funding from venture capital firms. The company developed an artificial pancreas system for people with type 1 diabetes and was acquired by Eli Lilly in 2021.
• JUMP Bikes: JUMP Bikes raised $1.3 million on WeFunder in 2017 and was later acquired by ride-hailing company, Uber, for over $200 million.
• Zenefits: Zenefits raised over $1.4 million on WeFunder in 2013 and went on to raise over $500 million in venture capital. The company was acquired by software company, Gusto, in 2020.

Best for: Startups in USA, Europe

Fees: For Reg CF, Wefunder charges 7.5% of the total fundraise, only if successful.  For instance, if a company raises $100,000, they charge $7,500 upon close.  There are no other fees.

For Reg A+, they charge a flat fee of $375K. This is 7.5% on a $5M raise

WeFunder offers the following types of raises:

• Regulation Crowdfunding (Reg CF) – Up to $5M
• Regulation A+ (Reg A) Up to $75M

Click Here to visit WeFunder

2.  StartEngine

Launched in 2014 by Howard Marks, StartEngine has helped hundreds of companies raise funds through equity crowdfunding campaigns.

When reviewing crowdfunding platforms the most important metric is the number of successful exits, as defined by a company going public or some other liquidation event. In this case StartEngine does not disappoint, whether it's through SeedInvest a competing platform that they acquired, or via their own platform they have seen over 40 successful exits.

This includes:

• Atlis Motors began work on its all-electric pickup trucks in November 2016. The EV company then raised more than $69.3 million over nine funding rounds, before completing an IPO in 2022.
• DSTLD started in Los Angeles in 2013 as a D2C luxury denim and retail operation. They raised $8.7 million dollars over six rounds, including $3.3 million via equity crowdfunding. The company then IPO’d on the NASDAQ in May 2021.
• The maker of autonomous security robots, Knightscope, opened up shop in Mountain View, California in 2013. The company raised $100 million, including over $77 million via equity funding, before listing on the NASDAQ in 2022.

Best for: Startups in USA

StartEngine offers the following types of raises:

• Regulation Crowdfunding (Reg CF) – Up to $5M
• Regulation A+ (Reg A) Up to $75M

Click Here to visit StartEngine

3.  Republic

Launched in 2016, Republic claims to have a 90% success rate for companies that have raised on their crowdfunding platform and to have raised over $1.5B. What sets this platform apart is the tech stack, the in-house investor relations team and founder-friendly tools make it easier than ever to manage investors, send updates about your campaign, and more.