Looking for the right crowdfunding platform online is like searching for a needle in a haystack.
Google returns 767,000 results and with more platforms opening every week, how do new investors pick the right site for their needs?
Swiss crowdfunder Investiere felt investors had the same problem, so has put together a list of Europe’s top five crowdfunding platforms by amount of cash pledged.
That’s not an infallible measure and not every site lists the amount of money collected for successful pitches, but the assumption is if the figure put them at the top of the table, they would should about it.
“We have too many crowdfunding platforms and consolidation in the field is inevitable,” said an Investiere spokesman.
“When that happens, expect the larger and better managed platforms to start swallowing their rivals.”
The leader board
Investiere believes total funding volume is the key to measuring how robust a crowdfunding platform is.
According to that yardstick, Europe’s top five crowdfunding platforms are:
Measuring performance is more complicated than looking at funding raised.
Different platforms have different models. Crowdcube and Investiere provide equity funding, while Wiseed acts as a middleman with a holding company for investor money. The German model is based around subordinate loans and no shareholding, which is a workaround that means crowdfunders in the Germany do not have to follow regulatory guidelines.
“Crowdcube is out in front because Britain has a regulatory structure that lessens the risk for investors,” said the Investiere spokesman.
The spokesman also explained the Seed Enterprise Investment Scheme (SEIS) tax breaks enhanced returns and reduced risk as well.
SEIS offers 50% income tax relief up to a maximum investment of £100,000 and capital gains tax exemptions on selling assets to raise investment cash, while the sale of SEIS shares is CGT-free.
If a SEIS startup fails, investors can also claim loss relief against other income.
SEIS tax breaks are available to expats, providing they pay income tax in the UK.