What is Equity Crowdfunding?
Equity crowdfunding is a mechanism of financing a startup company open to every individual, which offers shares and/or profits (return of investment) in exchange for funding the startup.
Equity crowdfunding is also referred to as investment-based crowdfunding or securities-based crowdfunding. It is also often called crowdinvesting. According to Lars Hornuf of the University of Bremen and Armin Schwienbacher of Skema Business School, crowdinvesting “denotes the Internet-based investment in startup companies by the crowd with the intention to obtain some residual claim on future cash flows of a firm”.
So, one can say that gradually definitions slightly merge and become similar, if not one in a broader sense.
Equity Crowdfunding Sites
- Micro Ventures — online platform for venture capital investments that is open to the public.
- Angel List — investment platform with a job board.
- Early Shares — passive income from real estate with 7% preferred returns and 18% internal rate of return.
- Localstake — invest in profitable small businesses with a minimum investment ranging from 250 to 500 dollars.
- Seed Invest — multiple tiers of companies to invest in, some accessible only to accredited investors.
- Oil.Vision — invest as little as ¥10,000 (approx. $88) and profit from the oil industry worldwide.