As crowdfunding becomes grows more popular for the average investors, alongside it grow the risks. There is growing evidence that the mainstream crowdfunding companies fail to properly check the companies listed on their site, meaning that it is more than likely investors lose out.
So, whilst it might be easier and quicker to gain funding for your startup by using a crowdfunding site, using an alternative site such as those listed below could work out better in the long run.
Venture Giant
More of an angel-startup network than a funding platform, Venture Giant‘s sole aim is to connect entrepreneurs with high net worth individuals looking to invest. The Venture Giant team carefully vet investors, before sending entrepreneur’s proposals out to those who are looking to invest in that particular sector or range.
Venture Giant do not get involved with deal negotiation between both parties and so do not charge a commission on any deals consummated through the platform; making it popular with investors, who save between 5 and 8 percent against other more mainstream platforms.
Venture Giant’s popularity is increasing fast as entrepreneurs begin to turn away from the classic crowdfunding approach and look towards something more structured. The site has seen an increase in over 67 per cent of investment proposals over the past year from businesses seeking equity finance.
In 2016 Venture Giant received more than 25,000 entrepreneur registrations, featured over 1,500 investment deals and funded more than £1 million worth of deals.
Funding Circle
More of a peer-to-peer lending service than a crowdfunding site, Funding Circle is the leading marketplace for business loans in the UK, US, Germany, Spain and the Netherlands. Its model allows people and organisations to lend directly to small businesses and has so far funded £2,188,811,194.
The company is no stranger to raising finance itself; in January its closed another successful funding round, raising $100 million led by Accel with participation from other previous investors including Baillie Gifford, DST Global and Index Ventures. The latest round, a Series F, was the largest funding round for a financial tech company out of Europe since April 2015 and brings the total raised by the company to around $375 million.
It counts the UK government amongst its investors, with The British Business Bank previously lending Funding Circle £60 million, which has been channelled to more than 10,000 businesses across the UK.
Angels Den
Angels Den is more like the traditional crowdfunding model that the other sites listed above, but has one key difference; making sure that there is a strong, experienced lead investor on board with the opportunity before opening it up to other investors. Investing with this model comes with the security that at least one experienced investor believes in the business, meaning it has been background checked and giving other investors more confidence in the business’ potential.
Angels Den have funded businesses including insurance company Goji and fashion tech startup Stylect, with over 90 percent of their funded deals still trading.