Heard of (or maybe even used) Crowdcube? How about Companisto, or Wiseed? It wouldn’t be a shock, as they are part of the list of Europe’s top 5 Crowdinvesting Platforms, as studied by Investiere Venture Capital. Based out of Switzerland, Investiere authored a study about the top 5 European crowdinvesting platforms. However, it is worth noting that these numbers come from the specific date of February 20th, and the websites examined were only those that published their funding volumes on their sites themselves.
Their conclusion? The growth of platforms makes it increasingly difficult to overview all of the actors: consolidation will soon take place. However, certain platforms are poised to best survive when this happens, that is, those with the most active and robust user-base.
But in the meantime, before we witness this consolidation, what are the top five crowdinvesting platforms? Well, it depends on what measure you want to use. Of two discussed in the study, Investiere points out that the funding volume overall is the strongest indicator of a crowdfunding platform and its strength. The list of the top five looks like this based on total funds raised:
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Crowdcube.com (UK) €82,838,846
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Seedmatch.de (Germany) €22,446,750
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Companisto.com (Germany) €16,348,945
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Wiseed.com (France) €15,343,600
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Investiere.ch (Switzerland) €11,949864
When looking at average amount raised for each successful financing campaign, the rankings look quite different:
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Companisto (€430,235)
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Crowdcube (€427,004)
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Investire: (€385,479)
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Seedmatch: (€295,352)
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Wiseed (€284,141)
Differing Minimums:
How each platform achieves these funding volumes is a worthwhile investigation. In fact, each has a different approach to minimum contributions per investor. For example, Investiere is the most expensive, coming in at €9,330 per investor, followed by Seedmatch, with a minimum of €250, and then Wiseed at €100 minimum. Crowdcube and Companisto each have £10 and €5 minimums respectively. However, these minimums correspond with these average investments: Investiere brings in on average €26,124 per investor, while the second biggest, Seedmatch, brings in on average €1,000.
Not all is equal…
Investment models and political conditions are the last two factors examined by Investiere. The findings here are athat the underlying investment models in each platform are not the same; Crowdcube and Investiere offer equity investments, making investors direct shareholders in the companies into which they invest. Howeer, Wiseed, for example, sets up a holding structure pooled into an SAS.
Seedmatch and Companisto, the two platforms from Germany, don’t offer equity, but subordinated loans. This means that creditors do not get paid out until all other creditors are paid in full. This makes an investment more limited for an investor, in terms of information and voting rights. However, this exempts the investments from the prospectus requirement of the German Federal Financial Supervisory Authority, making this cheaper and more time efficient.
However, compared with the rest of Europe, the UK has it great. Its crowdinvesting regulations and guidelines are the most advanced in all of Europe, dramatically reducing the risk for investing companies. Additionally, investors are strongly incentivized through taxes to fund startups. This is through the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme. The tax reliefs include reduced initial tax and also reductions and exemptions on capital gains tax.