Equity crowdfunding platforms allow businesses to sell parts of their company to the “crowd”. You invest small parts of money in a business and in turn receive equity in the company.
The companies looking for equity crowdfunding are usually early-stage startups, so the risk involved is a lot higher than the risk involved when you buy equity through the stock market.
You get a chance to get involved as an early investor in a startup that you believe in and enjoy their success later.
Getting your investment back can happen in 2 ways:
- either through profit-sharing – unlikely, as startups rarely generate any profit
- by selling your shares to somebody else – this can happen either by selling your shares on a secondary market or because of the company gets listed on the stock market, is bought by another company or wants to buy back its equity from you
Some of the European equity crowd-investing platforms that I like are below.
Seedrs is a UK platform where startups are looking for funding in exchange for equity in their company. Most of the startups on the platform are from the UK, although there are many from other parts of Europe as well.
You can invest small amounts of money (even 10 GBP) in startups you like and then wait for an exit opportunity to sell your shares for a profit.
There’s also a secondary market where you can sell your shares to other investors in case you don’t want to wait for an IPO or for the business to be sold in order to get your investment back. Periodically, Seedrs does a revaluation of each company, so the shares might be worth more or less when you plan to sell them on the secondary market.
You can read more about Seedrs here.
Crowdcube is another UK platform that has more than 600.000 members. It’s the largest community of crowd investors in Europe.
The startups pitch their ideas here similar to how they do it on Seedrs. Some startups even alternate funding rounds between the 2 platforms (Revolut or WiseAlpha did this).
There’s no secondary market where you could sell early your shares, but typically the startups describe their exit strategy and the time horizon for that.
You can read more about Crowdcube here.
Companisto is an equity crowdfunding platform from Germany. Depending on the project, you can invest either as a shareholder, and receive company equity, or as a lender, and receive interest payments.
It doesn’t have a secondary market, so it’s not easy to exit your investment.
Funderbeam is an Estonian equity crowdfunding platform that markets itself as the first stock exchange for startups.
It uses blockchain to tokenize company securities (loans or shares). After the company receives funding, the loan parts or shares can be traded on the secondary market. Based on demand, the prices for these securities go up and down. It’s a really interesting platform to use.
FundedByMe is a Swedish equity crowdfunding platform helping Scandinavian startups find funding.
The minimum investment depends on the project, but it’s usually around 100 EUR. One thing to mention though is that all investments are in SEK (Swedish Krona).
The platform has a “Trading Day” concept, where investors can sell/buy shares from one another if they want to exit their investment earlier. A sort of limited secondary market.
If FundedByMe is not exactly what you’re looking for, you can also check their competitor from Finland, Invesdor.
Wiseed is a French equity crowdfunding platform that unfortunately has only a French version of its website (and a very limited English/mostly French version).
If you don’t mind the language, you can invest in French startups either by buying equity or by investing in loans offered to the companies.
WeAreStarting is an Italian equity crowdfunding website that lets you invest in Italian startups. If you want to get involved in the Italian startup ecosystem, this is the place to start with.
OnePlanetCrowd is similar to WeAreStarting or Wiseed, except it lets you invest in startups from the Netherlands. You can invest either in loans or convertible loans, depending on the project.
This is the last one from my list. Spreds is an equity crowdfunding website from Belgium offering a variety of investments from all over the world.
I haven’t tried this one yet, but I’ll give it some thought in the near future.