This is a yearly update from our last review in 2019 which covers how we build our ranking. We break up our list to Accredited focused top 10 and regulation crowdfunding, non accredited focused portals.
Non Accredited Top 10
Accredited Top 10
We had previously been able to attain data on funding volumes, but that has changed years ago now, so our ability to properly rank is not an option. We have a list of investing portals and look for feedback on how to best take the factors we measure.
Regulation Changes Helps Grow Market for 2020
- Regulation CrowdFunding (Reg CF) maximum amount a company can raise was increased from $1M per year to $5M for startups.
- Compliance review of the business can now be completed just before closing of the funding round, which will reduce up front time for entrepreneurs.
- Becoming an accredited investor can now be accomplished through taking tests, adding to the existing wealth requirements that had already been in place.
- The cap on the amount an individual can invest for Reg CF offerings is capped for non accredited investors. This cap previously applied to accredited investors as well, but has since been lifted.
These changes have helped to create healthy growth for several platforms. We have observed investing portals close shop over the years, but an increase in consolidation and acquisition has accelerated.
Wefunder's Nick Tommarello announced their #1 spot in market share via their year end review. They credit the sharp increase in growth to the custodian structure to investments they rolled out in Q2. This groups all investors as a single entity to simplify the cap table and paperwork processing. This is appealing to both entrepreneurs and investors.
They set a goal to increase market share past 50% in 2021. They achieved close to $5 million in revenue for 2020 running at a "small" net loss. Though they are a B Corp so income level is not the focal metric.
- 538 startups raised money since inception
- $87.2 million raised in 2020
- $204 million raised since inception
- $5 million revenue for 2020 prior to full GAAP review, growth resulting in $8 Mil run rate
- $4 Billion in follow on investments by institutional investors
- 25 full-time salaried employees
- iPhone app created December
Only a few days after the post there are dozens of comments on the announcement including praise, discussion on investing support, and suggestions for improvements with customer engagement. I agree with Nick in not thinking it would take so long for the regulations to get rolled out as they are today, but join in the congratulations for growth and results achieved.
Max Crawford authors regular updates on the overall industry and StartEngine performance and he released the 2020 StartEngine's Review.
- 150 companies raised money in 2020
- $250 million raised since inception
- $137.9 mil raised in 2020
- $24.3 mil in money raised for StartEngine across 16,682 individual investors
- 49 full time employees