The Best Startup Crowdfunding Investment Sites in Europe

December 11th, 2020
10 minutes read
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There’s something special about investing in start-ups. Who doesn’t want to be that early investor, making a fortune as this garage-based company grows to become a globally known unicorn? It’s not only about making money – and start-up equity is probably the best way to hit a colossal return. It’s also about the thrill of owning a stake in an early-stage business you believe in, watching it grow and eventually sharing its success (or failure).

Here are some of our top choices where to start investing in start-ups with equity crowdfunding.

Best Startup Equity Crowdfunding Sites in Europe

Crowdcube

  • Launch date: 2011
  • Total capital invested: No data
  • Number of funded ventures: 1,200
  • Minimum investment: £10 / €10
  • Investment fees: 1.5% of the amount invested (minimum £0.50, maximum £250.00)
  • Shareholder structure: Direct (you own the shares) and nominee (the platform buys shares on behalf of investors)
  • Campaign types: Equity, convertible and bonds
  • Sectors: Apparel & accessories, home and personal; automotive, transport & mobility; food & beverage; health-tech & healthcare; leisure, hospitality & tourism; and more
  • Secondary market: No
  • Auto-invest function: No

Crowdcube has been one of the world’s first equity crowdfunding platforms. It focuses mainly on the UK market, although you can also find companies from all over Europe. Of the 960 businesses on Crowdcube, 760 are still trading and 58 have delivered financial returns through exits, bond repayments and dividends. Successful exits provided shareholders with a total of £50 million in returns, with the most spectacular venture – mobile banking app Revolut, hitting 1,900% return in just two years. Aside from start-up equity investments, you can also invest in fixed-interest bonds from more mature companies.

Pros

  • A lot of projects
  • An advanced due diligence process
  • A high success rate of 85%

Cons

  • No early exit options
  • Fee applies regardless of outcome
  • Limited investment functions

Seedrs

  • Launch date: 2012
  • Total capital invested: £980+ million
  • Number of funded ventures: 1,196
  • Minimum investment: £10 / €10
  • Investment fees: 7.5% carry on the profit; 1.5% transaction fee on the secondary market; 2% portfolio fee when investing in a fund
  • Shareholder structure: Nominee
  • Campaign types: Equity, convertible, cohort and funds
  • Sectors: Energy, fintech, food & beverage, healthcare, property, and more
  • Secondary market: Yes
  • Auto-invest function: Yes

Seedrs is another UK-based platform, although the offerings come from across Europe. Seedrs offers relatively many ways to invest in businesses, including cohort and fund campaigns. In the case of a cohort campaign, you invest (buy shares) in multiple businesses with one click of a button. Funds, on the other hand, are a fixed-interest option, where you don’t own shares in the underlying businesses.

Pros

  • Only pay fees if you profit
  • Large range of products & projects
  • Secondary market

Cons

  • A relatively high success fee
  • Not that good Auto-invest function
  • No direct share ownership

Invesdor

  • Launch date: 2012
  • Total capital invested: 160+ million
  • Number of funded ventures: 200+
  • Minimum investment: €20
  • Investment fees: Administrative fee of up to 1% of the invested amount; transaction fee depending on the payment method
  • Shareholder structure: Direct
  • Campaign types: Equity, convertible and bonds
  • Sectors: Technology, finance, and food & drink
  • Secondary market: No
  • Auto-invest function: No

Invesdor brings together companies from the Nordic and German-speaking countries. Invesdor is known for their commitment to support the registered businesses (incl. legal advice, auditing services or branding development). The firms vary across industries, although there seems to be a lot of environmentally- friendly and social ventures. There is also a good variance in maturity stages, so you can also find some more established companies.

Pros

  • Largest cross-border Nordic equity crowdfunding platform
  • Choices of green/social businesses
  • Invesdor has a close relationship with businesses it serves

Cons

  • No early exit options
  • Variable and somewhat untransparent fees
  • Limited investment products and functions

Companisto

  • Launch date: 2012
  • Total capital invested: €80+ million
  • Number of funded ventures: 162
  • Minimum investment: €500
  • Investment fees: None for investors, 15% of the collected investment sum for business owners
  • Shareholder structure: Direct or indirect via a special purpose vehicle (SPV)
  • Campaign types: Only equity
  • Sectors: IT, software, consumer products, e-commerce, social media, energy, and more
  • Secondary market: No
  • Auto-invest function: No

Companisto is a leading German equity crowdfunding platform. Its key competitive edge lies in the online communities it supports. The users, or ‘Companists’, can join Companisto Investment Club to network, ask questions and exchange tips with each other, angel investors and business owners. There is also Companisto Angel Club – a closed area for professional investors and business angels.

Pros

  • No fees for investors
  • Online communities for users
  • Many professional investors

Cons

  • High minimum investment
  • Only equity deals available
  • Some deals are restricted to the Companisto Angel Club members

FundedByMe

  • Launch date: 2012
  • Total capital invested: €70+ million
  • Number of funded ventures: No data
  • Minimum investment: €100 (can be higher depending on the deal)
  • Investment fees: 1.5% of the amount invested (minimum SEK 5.00 or €0.5, maximum SEK 1,000 or €100)
  • Shareholder structure: Direct
  • Campaign types: Only equity
  • Sectors: Financial services & payments; automotive, transport & mobility; real estate & prop-tech; music, media & entertainment; energy & renewables; and more
  • Secondary market: No, but ‘trading days’ are organised
  • Auto-invest function: No

FundedByMe originates from Sweden, but ‘internationality’ is its key focus, with users from all over the world and joint ventures in Finland, Poland, Malaysia, The Netherlands, Singapore and The United Arab Emirates. Interestingly, it started as a reward- and donation-based crowdfunding platform in 2011 and shifted into equity in 2012. Its approach to private trading is somewhat innovative, with no secondary market available but ‘trading days’ organised a few times per year. Essentially, once in a while the platform helps bring potential buyers and sellers together – it is not involved in the actual trade though.

Pros

  • Global reach
  • Some early exit options
  • Well-recognized and awarded platform

Cons

  • High minimum investment
  • Unclear how share selling happens
  • Limited investment options and functions

Funderbeam

  • Launch date: 2013
  • Total capital invested: €26+ million
  • Number of funded ventures: 36,000+ trades completed on the marketplace
  • Minimum investment: Depends on the deal – between €250 and €1,000 for fundraising campaigns, from €1 on the marketplace
  • Investment fees: A complex fee structure, including a carry fee (3%), an initial selling fee (3%), a trading fee (0.5%), termination charge (€750) and others. Check this link for details.
  • Shareholder structure: Indirect (through an SPV) or nominee
  • Campaign types: Equity, convertible, bonds and funds
  • Sectors: Mobility & logistics, food & drink, biotech & medicine, financial services, health & fitness, and more
  • Secondary market: Yes
  • Auto-invest function: No

Funderbeam has a rather unique business model. It brands itself as a global start-up stock exchange. Companies first raise funds through a ‘traditional’ campaign (as on the other platforms). The securities are then tokenized, using blockchain technology, and put up for trading on the Funderbeam Marketplace. There, token (share) prices go up and down based on the demand, and you can buy and sell tokens (shares) just as you would on the stock exchange. This brings you almost instant liquidity traditionally absent in equity crowdfunding.

Pros

  • Very high liquidity
  • Start trading from just €1
  • You can make a profit even if the company is not yet profitable (buy low, sell high)

Cons

  • A very complicated fee structure
  • Volatile share prices
  • A somewhat untested ‘trading focused’ business model

Which startup equity crowdfunding platform in Europe is the best for investing?

Before you start investing in start-ups, you should be aware of some of the drawbacks. It is a high-risk and long-term investment – it can take many years to cash in the returns and there’s a possibility you will lose all your capital invested. Equity crowdfunding is generally not recommended for inexperienced investors, and even for savvy investors, it should always be a relatively small part of the portfolio and leveraged with other, less risky investment products.

But equity crowdfunding is also a great way to hit returns impossible to achieve elsewhere, and an adventure in and of itself – you get to own a piece of a business and watch it grow. With more and more equity crowdfunding platforms out there, investing in start-ups is easier than it’s ever been. It’s tricky to pick a single best site – at the end of the day, the choice of the particular venture you feel strongly about is the most important. However, you may have some preferences that will make some platforms more suited for you than others. For example, you might want to have an early exit option available, avoid up-front fees, or pick one with a low minimum investment threshold for a start. In such a case, we hope our overview helps you make the right choice.

Methodology

When choosing the top startup equity crowdfunding investment sites in Europe, we considered a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform(fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).