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<p>Once you’re ready to choose an equity crowdfunding portal you’re pretty far along the equity crowdfunding path. By now you’ve already <a href="https://www.thecrowdfundinglawyers.com/is-equity-crowdfunding-right-for-your-company/">decided that equity crowdfunding is right for your company</a>. You’ve reviewed <a href="https://www.thecrowdfundinglawyers.com/four-keys-to-a-successful-equity-crowdfunding-raise-reg-cf/">four keys to a successful equity crowdfund</a>. And now you (and your lawyer) are ready to go portal shopping. </p>
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<p>Indeed, the company must consider many factors in choosing an equity crowdfunding portal. And because portals sell <a href="https://cdn.crowdfundinsider.com/wp-content/uploads/2019/06/SEC-regulation-crowdfunding-2019_0.pdf">90% </a>of equity crowdfunded securities the right “fit” is crucial. For instance, the biggest portal may not be best if your company will likely to mostly attract local investors. And a specialty portal may look great but if the investor list is skimpy, you’ll need to move on.</p>
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<p>Thus, here are some considerations when choosing an equity
crowdfunding portal </p>
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<h2 style="text-align: center;"><strong>Federal and state equity crowdfunding portals; different strokes for different companies &nbsp;</strong></h2>
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<p>To start, most companies look to the federal portals. To the extent equity crowdfunding has entered the public conscious its likely through <a href="https://www.thecrowdfundinglawyers.com/reg-cf/">Reg CF</a> the federal exemption with the $1.07M limit. There are currently <a href="https://www.finra.org/about/funding-portals-we-regulate">45 Reg CF portals</a> located throughout the country. But really only a few actually warrant consideration if you don’t have a massive ready-made crowd or marketing budget. </p>
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<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2017/08/CFcanvas.png" alt="Equity Crowdfunding Portals" class="wp-image-136" width="605" height="373"/><figcaption><strong>Source: Crowdfund Capital Advisors</strong></figcaption></figure></div>
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<p>But really the market looks more like this. </p>
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<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/09/Wefunder-Chart-1.png" alt="Equity Crowdfunding Portal Investment" class="wp-image-3724" width="586" height="425"/><figcaption><strong>Source: </strong><a href="https://medium.com/@jonnyprice/regulation-crowdfunding-three-years-in-29766d0b80a2"><strong>Jonny Price, WeFunder</strong></a></figcaption></figure></div>
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<!-- wp:image {"id":3726,"align":"center","width":588,"height":426} -->
<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/09/Wefunder-Chart-2.png" alt="Equity Crowdfunding Portal Investment" class="wp-image-3726" width="588" height="426"/><figcaption><strong>Source: </strong><a href="https://medium.com/@jonnyprice/regulation-crowdfunding-three-years-in-29766d0b80a2"><strong>Jonny Price, WeFunder</strong></a></figcaption></figure></div>
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<p>Thus <a href="https://wefunder.com/">WeFunder</a>, <a href="https://www.seedinvest.com/">Seed Invest</a>, and <a href="https://www.startengine.com/">Start Engine</a> are industry leaders with <a href="https://republic.co/">Republic</a>, and <a href="https://microventures.com/">MicroVentures</a> also having market share. </p>
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<p>Companies should know that all but one of these is in
California. So if you’re not West Coast think about what you can offer them as
much as what they can offer you. Do you have cool technology? An interesting
idea? A new approach to solving old problems? Be aware there is a supply and
demand issue with the big West Coast portals because they have large investor
lists you gain access to with acceptance on their platform. </p>
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<p>Being in the South, Midwest, or East Coast is not necessarily
a deterrent to acceptance. In fact, some portals <a href="https://republic.co/about">stress</a> they scout companies throughout the
country. But be prepared to pitch!</p>
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<h2 style="text-align: center;"><strong>If you choose a federal equity crowdfunding portal, be aware of the differences.</strong></h2>
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<p><strong>WeFunder</strong>: A great all-purpose portal with a massive
investor list that has funded all sorts of startups with the <a href="https://medium.com/@jonnyprice/regulation-crowdfunding-three-years-in-29766d0b80a2">top
being</a> Food &amp; Beverage, Software, and Entertainment. And a <a href="https://www.crowdfundinsider.com/2019/04/146023-chattanooga-football-club-scores-some-serious-funding-on-wefunder/">soccer
team</a>! </p>
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<p><strong>Start Engine</strong>: A leader in the token/crypto space that
<a href="https://www.crowdfundinsider.com/2018/07/136687-startengine-will-now-accept-bitcoin-from-investors-for-the-reg-cf-offerings/">accepts
Bitcoin</a>, has run its <a href="https://www.crowdfundinsider.com/2018/12/142856-startengine-to-close-reg-d-sto-round-after-securing-10-million-target/">own
token offering</a> and is leading secondary-market development with their <a href="https://www.crowdfundinsider.com/2019/08/150578-startengine-receives-ats-license-so-when-will-secondary-trading-in-crowdfunded-securities-start/">recent
approval</a> as an Alternative Trading System. </p>
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<p><strong>Republic</strong>: Part of a family of startup platforms
together with <a href="https://angel.co/" target="_blank" rel="noreferrer noopener">AngelList</a> and <a href="https://www.producthunt.com/" target="_blank" rel="noreferrer noopener">Product Hunt</a>. “<a href="https://www.crowdfundinsider.com/2019/07/149425-republic-update-over-80-campaigns-funded-more-than-3-million-note-tokens-distributed/">Mission
driven</a>” portal that also is a crypto leader. It was the first to do an <a href="https://www.crowdfundinsider.com/2019/08/150147-republic-first-althea-airdrops-tokens-under-reg-cf-exemption-no-payment-necessary/">air
drop</a> and has a unique Note Token digital asset. </p>
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<p><a href="https://www.seedinvest.com/">Seed Invest</a> which
was bought by Circle last year and <a href="https://microventures.com/">MicroVentures</a>
which split from Indiegogo are going through transitions but are still industry
leaders. </p>
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<p>Still other Reg CF portals remain as viable options. For example,  <a href="https://us.trucrowd.com/">TruCrowd</a> a Chicago-based portal has also developed three specialty portals <a href="https://musicfy.us/">https://musicfy.us/</a> (Music), <a href="https://cryptolaunch.us/">https://cryptolaunch.us/</a> (Tokens), and <a href="https://fundanna.com/">https://fundanna.com/</a> (Cannabis). But current offerings are slim. </p>
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<h2 style="text-align: center;"><strong>State-based portals can be a viable alternative to federal Reg CF equity crowdfunding portals</strong></h2>
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<p>But not all companies are good fits for the big West Coast portals. For example, businesses that aren’t likely to scale, whose investors will mostly be local, or those with strong state appeal may be <a href="https://www.crowdfundinsider.com/2016/05/86096-intrastate-crowdfunding-the-often-overlooked-option/">better staying in-state</a>. </p>
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<p>Although all investors must be state residents, these portals can offer advantages. 1. There is likely to be less compliance costs with a smaller regulatory burden and supportive state government. 2. Higher limits (although not always). This means one big investor can really jumpstart a raise. 3. Opportunity for localized wealth creation, and. 4. Less marketing costs. </p>
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<p>As of 2017 according to lawyer <a href="https://crowdfundinglegalhub.com/2017/08/28/2017-state-of-the-states-list-of-current-active-and-proposed-intrastate-crowdfunding-exemptions-updated/">Anthony
J. Zeoli</a> most states had already approved state portals or were in the
process. </p>
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<!-- wp:image {"id":3736,"align":"center","width":636,"height":507} -->
<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/09/State-Crowdfunding.jpg" alt="State Equity Crowdfunding Portals" class="wp-image-3736" width="636" height="507"/><figcaption><strong>Source: </strong><a href="https://crowdfundinglegalhub.com/2017/08/28/2017-state-of-the-states-list-of-current-active-and-proposed-intrastate-crowdfunding-exemptions-updated/"><strong>Anthony J. Zeoli, Crowdfundinglegalhub.com</strong></a></figcaption></figure></div>
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<p>For a list of state-crowdfunding rules <a href="https://media2.mofo.com/documents/171101-state-crowdfunding-regulations.pdf">see
here</a>. </p>
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<p>And at least one innovative platform has combined the two. <a href="https://sppx.io/">Silicon Prairie</a> offers a <a href="https://www.thecrowdfundinglawyers.com/reg-cf/">Reg CF</a> portal along
with <a href="https://www.crowdfundinsider.com/2019/06/148442-crowdfunding-platform-silicon-prairie-is-approved-as-a-state-regulated-broker-dealer-no-finra-oversight/">state-based
portals</a> in Michigan, Iowa, Minnesota, and Wisconsin where state limits are
as high as $5 million. </p>
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<h2 style="text-align: center;"><strong>Your equity crowdfunding portal choice will factor into your raise’s success</strong></h2>
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<p>Sherwood Neiss, principal of the analytics firm <a href="http://crowdfundcapitaladvisors.com/">Crowdfund Capital Advisors</a>, <a href="https://www.crowdfundinsider.com/2019/08/150297-report-states-that-reg-cf-has-topped-250-million-in-commitments-but-falls-short-of-potential/">estimates</a> the next two years will bring 3,400 companies, half a billion dollars, and over half a million investors into the <a href="https://www.thecrowdfundinglawyers.com/is-equity-crowdfunding-right-for-your-company/">equity crowdfunding world</a>. And help from Congress or needed <a href="https://www.thecrowdfundinglawyers.com/shallow-end-jay-treads-water-while-reg-cf-sinks-but-is-help-on-the-way/">changes by the SEC</a> would bring much more. </p>
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<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/08/Sponge-Bob-Amazing-GIF.gif" alt="" class="wp-image-3658" width="440" height="324"/></figure></div>
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<p>And as more companies take advantage of the opportunity, they will have to choose the right equity crowdfunding portal. Indeed, your choice of an equity crowdfunding portal will go far in determining the success of the campaign. </p>
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<p>By <a href="https://twitter.com/thecrowdfundlaw">Jossey PLLC</a>
via <a href="http://www.thecrowdfundinglawyers.com">www.thecrowdfundinglawyers.com</a>
</p>
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<p><a href="https://www.thecrowdfundinglawyers.com/cfl-scheduler/">Schedule a call or video conference</a> </p>
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<p>Disclaimer </p>
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<p>This post is for informational purposes only. It does not
represent a contract, offer, or any legal obligation on the part of Jossey
PLLC. Many factors go into a successful raise including appeal of the product,
competition for the product, the quality of the marketing, operating history of
the company, experience of management, and ability to self-generate crowd
investors. Legal and regulatory compliance is only one part. Investing in small
companies and startups carries lots of risk, there is no guarantee your company
will have a successful raise.</p>
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