In 2012, Oculus VR raised $2.4 million through crowdfunding before being acquired by Facebook for $2 billion1. While this was a rewards-based campaign, early efforts in crowdfunding, such as distance learning platforms like Oculus and others, set the stage for equity crowdfunding platforms that provide ownership in startups.
Equity crowdfunding platforms have proven to be powerful funding tools today. They give startups capital and power to everyday investors as equity shareholders in exchange for their capital commitment. These platforms attract both startups and investors as they help democratize investment options.
This article explores the best equity crowdfunding platforms, their key features, and practical guidance to help startups and investors navigate this exciting space.
What is equity crowdfunding?
Equity crowdfunding is a method where startups raise capital by offering equity shares to a large pool of investors through crowdfunding companies2. Unlike rewards-based crowdfunding, which provides products or perks, equity crowdfunding gives investors partial business ownership.
It appeals to startups seeking alternative funding and investors seeking early access to promising companies through trusted equity crowdfunding sites.
How equity crowdfunding works
Pitch creation
An essential part of every equity crowdfunding campaign is a reliable pitch deck. To illustrate the business idea, problem solution, target market, and financial return possibilities.
The goal of a pitch deck is to get investors’ attention. Investors trust well-prepared decks to make informed decisions because they boost business credibility, which leads them to complete additional evaluations of the opportunity.
Setting funding goals
Startups must decide how much capital they need and how much equity they will offer in return. This balance directly impacts investor interest in equity-based crowdfunding platforms. Many equity crowdfunding platforms let you establish a target funding amount2.
Marketing the campaign
Simply listing on the best startup investment sites isn't enough. Startups need a clear marketing strategy to generate visibility and excitement. This includes social media promotion, PR outreach, and leveraging existing networks to drive traffic to the campaign page and build momentum on the best crowdfunding sites for investors.
Managing investor relations
Once funding is secured, ongoing communication with investors is critical2. Successful startups on the best crowdfunding sites for startups send regular updates, financial reports, and milestone achievements. This is necessary to maintain transparency, strengthen investor trust, and lay the groundwork for future funding rounds.
At what stage do businesses use equity crowdfunding?
Early-stage startups
Early-stage startups often use equity crowdfunding to raise seed funding2. This allows them to validate their concept, attract early adopters, and secure initial capital to develop products and build a foundational team. Equity crowdfunding platforms provide these startups access to investors willing to take on early-stage risk in exchange for potential high returns.
Growth-stage businesses
Established companies use equity crowdfunding on crowdfunding investment sites to scale operations, launch new products, or expand into new markets. Their existing traction helps attract investors looking for companies with proven performance and clear growth potential.
Mature businesses
Equity crowdfunding platforms allow mature companies to diversify their funding sources and lessen their dependence on regular sources such as venture capital and bank loans. For businesses with a solid history of operations, this is an opportunity to engage retail investors and broaden the base of those who invest in them.
Bridge funding
Businesses also turn to the best equity crowdfunding platforms for bridge funding, raising capital between formal investment rounds2. This short-term funding helps companies maintain momentum, support ongoing growth, and meet operational needs while preparing for a larger funding round.
Key benefits of equity crowdfunding
Access to capital
Equity-based crowdfunding allows underfunded startups to raise money when banks, VCs, or angel investors are unavailable. By connecting with individual investors on equity crowdfunding platforms, startups gain access to capital that helps them launch, grow, or scale their businesses3.
Community engagement
Engaging early investors through equity crowdfunding platforms does more than raise capital — it helps build a community of advocates.
These investors are often emotionally invested in the following:
- The company’s success,
- Helping spread brand awareness,
- Sharing updates within their networks,
- Offering valuable feedback.
The push towards funding on the equity platforms, where investor enthusiasm drives momentum, is meant to be very much aided by the credibility this community support can bring.
Market validation
Strong interest from investors on top crowdfunding platforms acts as market validation3. Suppose people are excited to buy equity every day. In that case, the business model and product offering work in the eyes of the market, increasing their confidence in future investors and potential partners.
Legal considerations and regulations
Once considering the advantages of equity crowdfunding, startups, and investors should explore the legal structure of crowdfunding with equity on U.S. platforms.
Equity crowdfunding platforms have clear rules for fairness, transparency, and investor protection. These key regulations include:
1. The JOBS Act and Regulation Crowdfunding (Reg CF) allow startups to raise capital from accredited and non-accredited investors4.
2. The SEC, which oversees equity crowdfunding platforms, ensures companies follow rules on4:
- Financial disclosures
- Risk transparency
- Investment limits are based on investor income and net worth.
3. Companies are also subject to annual caps on fundraising amounts under Reg CF.
By following these regulations, equity crowdfunding platforms foster trust and help create a safer environment for all participants, supporting the industry's long-term growth.
Platform selection criteria
For startups looking for capital, the right equity crowdfunding platform is crucial, and for investors hoping to find promising opportunities, the right equity crowdfunding platform is essential. Various factors decide which crowdfunding platforms for investors will suit you better. The following are the key factors to consider:
- Fees: Platforms charge different listing, success, and transaction fees. Compare costs to find one that fits your budget5.
- Industry focus: Some platforms specialize in tech, consumer goods, or real estate, so aligning your business type with the platform’s focus increases visibility with the right investors.
- Support services: The best platforms offer pitch deck guidance, compliance support, and marketing tools to help your campaign succeed5.
- Investor reach: Consider platforms with large, active investor networks, especially if you want to maximize exposure to non-accredited and accredited investors5.
By matching these criteria with your business goals, you ensure that you choose a platform that will help you achieve your equity crowdfunding success.
Popular equity crowdfunding platforms
1. StartEngine
StartEngine is one of the largest crowd equity funding platforms, known for its large investor base and support for accredited and non-accredited investors. It offers tools for campaign creation, investor management, and even secondary trading, allowing investors to buy and sell shares after initial funding rounds6.
StartEngine offers broad reach, a secondary market for trading shares, and strong marketing tools to help campaigns succeed6. However, its higher platform fees make it more expensive than some competing equity crowdfunding platforms.
2. SeedInvest
SeedInvest is known for its rigorous vetting process, accepting only a small percentage of startups that apply. This strict screening appeals to quality-focused investors seeking high-potential opportunities on trusted crowdfunding private equity platforms.
3. WeFunder
WeFunder brings more advantages to startups and crowd investors than other crowdfunding sites. Early-stage businesses can use WeFunder because it enables founders to seek capital through modest investments while gathering funds from friends, family, and the general public6.
4. Republic
Republic has earned a reputation as one of the most inclusive crowdsource funding sites, welcoming accredited and non-accredited investors2. Republic also provides startups with investment, crypto, real estate, and video game opportunities, giving investors access to various asset classes on one platform.
5. MicroVentures
MicroVentures combines crowd equity investing with venture capital, offering a hybrid model where retail investors can co-invest alongside institutional firms6. It benefits startups from professional investor oversight while allowing individual investors to access deals typically reserved for larger firms.
6. EquityNet
EquityNet stands out for its advanced analytical tools, which help startups create detailed business plans and investors assess investment potential more effectively. This data-driven approach will appeal to investors who seek transparency in their money, and businesses that can depend on it will sharpen their pitch and financial projections before listing their companies on the platform.
7. Fundable
Fundable offers a dual approach, allowing companies to raise funds through either equity crowdfunding or rewards-based campaigns, depending on their needs6. In addition to funding options, Fundable provides consulting services to help startups prepare pitches, structure campaigns, and market themselves effectively to potential investors.
8. CrowdStreet
CrowdStreet is a real estate crowdfunding platform where investors can invest in commercial property deals in the United States of America. Real estate is a go-to market for those accessing it through the real estate equity Crowdfunding website. The platform only allows access to accredited investors and promises institutional-quality properties.
9. AngelList
AngelList is a leading platform for tech startups. It connects founders with a global network of accredited investors. The platform's syndicate model allows experienced angel investors to lead deals and smaller investors to co-invest alongside seasoned professionals.
10. CircleUp
CircleUp uses data-driven technology to identify and fund high-potential consumer brands. By combining machine learning and human expertise, the platform offers curated deals with strong growth for investors6. It is a top choice for investors interested in consumer product startups through equity crowdfunding.
How to choose the right crowdfunding equity platforms
Industry fit
Different crowd equity investment platforms focus on other industries. Startups should choose platforms aligned with their sector: tech, consumer goods, real estate, or sustainable products. Matching your industry to the platform's investor base ensures your pitch to investors already interested in your space.
Funding goals and fee structures
Each equity-based crowdfunding platform approaches funding targets and fee structures differently. Some have more successful fees from lower minimum raises, and others gladly accept lower fees from more significant raises but with a stricter screening process.
Accessibility for non-accredited investors
Some crowdsourcing investment platforms focus on accredited investors, while others welcome non-accredited investors, expanding the potential investor pool. Startups seeking broad community engagement should prioritize platforms open to non-accredited investors, while companies looking for more extensive checks may prefer accredited-only platforms.
Common mistakes to avoid when using equity crowdfunding platforms
Unclear pitch or value proposition
A weak or unclear pitch is one of the biggest reasons campaigns fail on top equity crowdfunding platforms7. Investors need to quickly understand what problem the business solves, how it stands out, and why it's a substantial investment opportunity. Grabbing investor attention or building trust is difficult without a compelling pitch.
Underestimating marketing efforts
Simply launching on an equity crowdfunding portal is not enough. Startups need a pre-launch marketing plan to build momentum, create buzz, and establish credibility7. Campaigns with strong early interest often attract more investors, while those with weak promotion struggle to gain traction, even on the best crowdfunding sites for business.
Lack of transparency
When investors fund a startup on an equity crowdfunding platform, they have clear expectations about the financial information, projections, and risk, as well as the honesty of the communication with the investor7. Not addressing or hiding challenges will become destructive, cutting trust from the relationship and ruining future contribution potential. It makes them believe that you have the understanding to see things in their best light.
Success stories: startups that thrived with equity crowdfunding
Avoiding common mistakes and leveraging the right platform has helped many companies looking for crowd equity investment, proving that equity crowdfunding platforms can fuel real growth.
BrewDog, the craft beer company, raised millions through crowd equity investment, turning its passionate customers into loyal shareholders who championed the brand8.
Digital bank Monzo bootstrapped its growth by raising capital through equity crowdfunding platforms. It attracted around 36,000 investors who became early adopters of its services and raised £20m9.
Each of these campaigns utilized a clear pitch, strong community engagement, and transparent communication which allowed them to thrive in crowd equity investment platforms.
When equity crowdfunding might not be the best option
While many startups have thrived through equity crowdfunding platforms, this approach isn’t suitable for every business. After reviewing success stories, it’s important to understand situations where equity crowdfunding may create more challenges than benefits.
High costs of compliance
Raising capital on equity investment platforms involves legal, accounting, and marketing costs. Preparing detailed financial disclosures, legal documents, and promotional materials can be expensive, especially for smaller startups raising modest amounts. Sometimes, these upfront compliance costs significantly reduce the net funds raised.
Dilution risks
Offering equity through a crowdfunding investment platform means giving up a portion of ownership2. For founders looking to retain maximum control, especially in early funding rounds, this dilution can limit future flexibility when negotiating with more prominent investors or during future rounds.
Managing a large pool of investors
Successful crowdfunding campaigns for equity platforms often attract hundreds or even thousands of small investors. This broad investor base is an advantage for community support and a pain point from an administrative perspective, as it requires ongoing communication, reporting requirements, and ensuring all investors' rights are respected.
Preparing a pitch deck for equity crowdfunding
A strong pitch deck is critical for success on equity crowdfunding platforms. It should communicate the business opportunity, provide essential data, and build investor confidence through transparency and strong visuals10.
Problem
Clearly define the market gap your business addresses, highlighting the pain points your product or service solves10.
Solution
Explain your unique selling points, focusing on what makes your product or service stand out from competitors10.
Market size
Present credible market research, showing the total addressable market (TAM) and demonstrating growth potential to justify the investment opportunity10.
Business model
To articulate revenue streams clearly, explain how the business makes money — whether through product sales, subscriptions, licensing, or other sources10. Use simple visuals like charts or diagrams to show each stream’s contribution to total revenue.
Financials
Investors on equity crowdfunding platforms expect transparent, realistic financial projections10. Present revenue forecasts, expenses, and profit margins based on conservative assumptions and clearly explain how the crowdfunding funds will be used to achieve growth.
Team
Highlight your team’s expertise and experience, emphasizing relevant industry knowledge, past successes, and unique skills that position your team to execute the business plan successfully. Investors want confidence that the team can deliver results10.
Elevate your equity crowdfunding campaign with a compelling pitch deck
A strong pitch deck is critical for success on equity crowdfunding platforms, but many founders struggle to create investor-ready presentations. Partnering with a reliable pitch deck specialist at ProPitchDeckServices.com helps ensure your deck stands out.
Their services include financial modeling, design enhancements, and storytelling to capture investor attention and build confidence. With so much competition on private crowdfunding platforms and crowdfunding sites for investors, a professional pitch deck can make the difference between funding success and missed opportunities.
Visit ProPitchDeckServices.com to start your consultation today.
Sources used in this article
- Oculus VR Investor: Facebook 'Came Knocking' In December And 'Fell In Love': https://www.businessinsider.com/oculus-vr-facebook-2014-3?r=US&IR=T
- Equity crowdfunding: https://carta.com/learn/startups/fundraising/equity-crowdfunding/
- 8 Benefits of Equity Crowdfunding: https://www.uschamber.com/co/run/business-financing/equity-crowdfunding-benefits
- Crowdfunding & Regulations: https://guides.loc.gov/fintech/21st-century/crowdfunding
- The Key Factors To Consider When Choosing A Crowdfunding Platform: https://fastercapital.com/topics/the-key-factors-to-consider-when-choosing-a-crowdfunding-platform.html
- 12 Best Crowdfunding Sites for Startups 2025: https://startupsavant.com/best-crowdfunding-sites-for-startups
- Common Mistakes in Equity Crowdfunding & How To Avoid Them: A Guide for Startups and Investors: https://media.hubtas.com/2023/11/01/common-mistakes-in-equity-crowdfunding-how-to-avoid-them-a-guide-for-startups-and-investors/#google_vignette
- Using equity crowdfunding to build a loyal brand community: The case of Brewdog: https://journals.sagepub.com/doi/full/10.1177/14657503221086101
- The story of Monzo: https://www.crowdcube.com/explore/raising/success-stories/monzo
- How to create an investor pitch deck: https://www.svb.com/startup-insights/startup-strategy/how-to-create-investor-pitch-deck-vc-angels/
