In: Finance
Assignment #3
Choose the optimal platform to raise $ 100 000
Two options:
Crowdfunding for Small Business
Crowdfunder
Their cut: Choose from two plans with varied
features: $299/month and $999/month.
Perks: Campaign plans include confidential
document protection, investor analytics, live support, and access
to their network of investors.
Caveats: You’ll need certain documents in order to
use their platform: a Term Sheet, Executive Summary, and an
Investor Pitch Deck.
All-or-nothing fundraising goals? Keep what you
raise.
SeedInvest
Their cut: $250 per month technology fee; 7.5% fee
for successful campaigns; and up to $3,500 in due diligence,
escrow, and legal fees for successful campaigns.
Perks: Experience. The founders are investors
themselves, and their support team has overseen billions in private
investments.
Caveats: Their vetting process is thorough, so
make sure you’ve got a professional proposal and expect it to take
some time before your project is approved or rejected.
All-or-nothing fundraising goals? Yes.
SeedUps
Their cut: 5% fee for successful campaigns.
Perks: When the SeedUps team reviews your
submission, they’ll give you suggestions for your campaign before
setting up your live project page.
Caveats: Fundraising range is between $25,000 –
$500,000.
All-or-nothing fundraising goals? Keep what you
raise.
StartUpValley
Their cut: 5% of successful campaigns.
Perks: Check out their blog for tips on successful
crowdfunding tips for startups.
Caveats: Currently in beta. They’re an equity-only
platform, so you must be willing to accept investments in exchange
for a stake in your company.
All-or-nothing fundraising goals? Yes.
Crowdfunding
Bolstr
Their cut: Bolstr’s attorneys review each campaign
before it’s launched, to protect both your business and potential
investors. Legal fees range from $500-$1,000 (you can also use your
own attorney). Other costs include a listing fee and regulatory
filing fees.
Perks: They help you raise funds from those most
likely to continue supporting you after your campaign ends: your
local community.
Caveats: Not for struggling businesses. If your
small business is thriving and you need funds to expand, Bolstr is
for you. Must be incorporated (no sole proprietorships allowed) and
pass their background checks.
All-or-nothing fundraising goals? Yes.
Community Sourced Capital
Their cut: A one-time $250 launch fee. Once your
campaign is successful, you’ll be charged $100 per month until the
principal amount on your loan is repaid.
Perks: Your $250 launch fee covers tech support,
marketing assistance, and administrative help.
Caveats: This is a loan, not a donation. Pledges
are set at a fixed amount of $50.
All-or-nothing fundraising goals? Yes.
Fundable
Their cut: $179/month. No fees are charged on the
funds you raise, but transaction fees apply.
Perks: Use their profile creation wizard to set up
an attractive campaign page.
Caveats: You can offer backers rewards or equity,
but not both.
All-or-nothing fundraising goals? Yes.
Funding Community
Their cut: Successful campaigns are charged an
origination fee of 2.5%.
Perks: You’ll receive better loan rates than from
banks or other traditional lending agencies.
Caveats: Loans are limited to $10,000 and must be
repaid within 9 months. Interest rates depend on the type of
company and your credit score.
All-or-nothing fundraising goals? Yes.
Localstake
Their cut: Choose from three plans with varying
support features and fees. For a business that has raised some
funding but wants to access Localstake’s investor audience through
their Boost plan, there is a one-time fee of $500, plus a fee of
3.75-7.5% for successful campaigns.
Perks: With the Boost plan, you’ll get a dedicated
advisor to help you run your campaign.
Caveats: Must submit an application before your
campaign is approved.
All-or-nothing fundraising goals? Yes.
Comparing all the platforms, optimal platform to raise $100 000 should be SeedInvest considering cost and advantages of the platform as mentioned below:
Reasons
Their cut is low: $250 per month technology fee;
Additional fees are conditional : 7.5% fee for successful
campaigns; and up to $3,500 in due diligence, escrow, and legal
fees for successful campaigns.
Perks in terms of experience is very important for a
successful campaign: The founders are investors
themselves, and their support team has overseen billions in private
investments.
Caveats are actually an advantage: Since their
vetting process is thorough, we need to make a professional
proposal which increases chances of a successful campaign. The only
disadvantage is that it might take some time before our project is
approved or rejected. In case rejected, we can choose the next
optimal platform.
All-or-nothing fundraising goals? Yes. This will
help to achieve the goal of raising full money.