Founded in 2011, Crowdfunder is a leading equity crowdfunding platform. Their mission is to bring capital to early-stage companies while providing an opportunity for investors to access top deal-flow. Mature companies are also welcomed for Series-A and Series-B funding. Businesses accepted include Tech Startups, Social Enterprises, Small Businesses, and Film & Entertainment.
- Model type
- Fund type
- Maximum allowed raise
- Administrative work options
Crowdfunder is an Equity crowdfunding platform. Unlike other crowdfunding sites which have restricted people to simple donations or the purchase of a product or rewards, Crowdfunder allows you to become an investor/shareholder in a company.
Since Crowdfunder charges a flat one-time fee to allow entrepreneurs to use the money they raise for their business, it functions as a "Keep What You Raised" funding type. With Crowdfunder, you get to keep the funds raised regardless of whether or not you reach your goal. This is because investors invest with the contingency of your business being a success and not if you reach your fundraising goal. This provides for more flexibility, since it's common to not reach your funding goal the first time around. The funds you do raise, if you get to keep them, can go towards growing the business.
Maximum Allowed Raise
There is no cap for the amount of funds you can raise, but Crowdfunder recommends a minimum investment of $5K - $25K. This is a good recommendation since most transactions happen in this range and the lower the minimum investment is, the wider the audience of investors you have to choose from. Crowdfunder also allows you to make changes to your fundraising goal at any time, but you'll have to also adjust these numbers in your deal documents with investors.
A campaign typically runs for 60-90 days on Crowdfunder. This time allows for you to leverage your network, generate leads, and close investors. Crowdfunder lets you extend your end date if you have not reached your fundraising goal.
Administrative Work Options
Crowdfunder offers analytics services to help with administrative tasks. Their analytics gives you insight into who is looking at your deal and what kinds of investors are interested.
When you pay for their Fundraising Pro plan, the following is included:
- Ability to Launch Deal on Crowdfunder
- Access to Crowdfunder's Investor Network
- Access to fundraising and marketing tools within our product
- Access to the Investor CRM system
They also offer what they call a "Knowledge Center" on their website. This Knowledge Center is free and consists of Do-It-Yourself tools like templates, webinars and Google Hangouts on topics such as "Crowd Expert Secrets to Crowdfunding Success" and "Equity Crowdfunding & the Future of Investing Online". These topics may be interesting, but not directly usable by businesses trying to raise funds. It also does not assist them with automating the fundraising tasks at hand. Crowdfunder does offer articles with fundraising information, such as an "Equity Crowdfunding Market Checklist". This also does not assist fundraisers with administrative needs. Some crowdfunding platforms offer administrative options at an additional fee in-house, but if you need admin help with your campaign aside from analytics, you'll have to look elsewhere.
Although they do not take a percentage of funds raised, Crowdfunder is expensive to do business with. It's initially free to join but they charge a monthly fee of $399 launch your project discoverable to their network of accredited investors and use the money you raise for your business.
The Amplifier Plan ($499/month) provides all the benefits of the Launch plan, but includes investor tools like deal analytics and investor browsing. It should be noted however, that as an alternative to this plan, customers can opt for one free month, and three total months of $999. The highest-tiered plan, known as the Accelerator, goes for $1,999/month. It includes all the features of the Amplifier plan, plus personal coaching, marketing templates, and tips on pitching to investors. While these are great features, spending nearly $2,000 a month can be a tall order to fill for people or businesses with few resources.
Another less-than-impressive aspect of Crowdfunder is that the company does not deal directly with investments and transactions. The actual transaction of wiring money does not happen through Crowdfunder, and the closing of dollars will happen offline with the company. Especially with such high fees, this is a feature Crowdfunder should be able to offer their users. It is rare in the crowdfunding industry to find a site that does not offer this typically included service.
The Bottom Line
As impressive as it is that the Crowdfunder team is working so hard to establish legislation and regulations for the crowdfunding industry, the fact is that their monthly subscription fees are incredibly high. Especially considering that the subscription does not include fund disbursement, entrepreneurs seeking a crowdfunding experience to grow their companies are likely to find another site to meet their needs at much lower cost.