GenesisAI

Mail Server Sign Up
by:
Archil Cheishvili
February 3, 2023

Comparison of different equity crowdfunding

Equity crowdfunding is a type of crowdfunding that allows startups to raise capital by offering equity shares in their business to investors. This is different from traditional crowdfunding platforms like Kickstarter, which allow businesses to raise money through pre-orders or donations.

Read More

What is equity crowdfunding?

Equity crowdfunding is a type of crowdfunding that allows startups to raise capital by offering equity shares in their business to investors. This is different from traditional crowdfunding platforms like Kickstarter, which allow businesses to raise money through pre-orders or donations.

Why invest in companies via equity crowdfunding?

Investing in early-stage companies can be risky, but it can also be very rewarding. Equity crowdfunding gives investors the opportunity to get in on the ground floor of a company and potentially see a large return on their investment if the company is successful.

Top 5 equity crowdfunding platforms

SeedInvest

SeedInvest is one of the largest and most popular equity crowdfunding platforms. They offer a wide variety of investment opportunities, including pre-IPO companies.

 

Although not every private company will result in lucrative returns for its investors, SeedInvest CEO pointed to a few companies that had increases in value after raising early funding on SeedInvest. According to Crowdfunding Insider these firms include:

 

Heliogen drew in $1.6 million from SeedInvest as part of their seed round in 2017 at a pre-money valuation of $20 million. This was done through regulated crowdfunding (Reg CF) and almost 1000 investors took part in the funding. In 2021, Heliogen went public with a valuation of $2 billion.

 

With an incredible 55% to 33% implied IRR, Knightscope raised capital multiple times through Reg D and Reg A+ on SeedInvest before finally taking their company public via IPO on the Nasdaq in 2022.

 

Over 2,700 investors showed their trust in Truststamp company by backing it in a Reg A+ offering that raised $6.5 million. In return, the company gave them an implied IRR of around 90%.

 

Shelf.io: In 2016, this company raised $475,000 in a Reg D offering and then went on to raise $52 million in a Series B round that provided an opportunity for SeedInvest investors to exit with an approximate IRR of 95%.

 

In 2016, PetDesk raised money through Reg D and was later acquired by another company in a private transaction. Those who invested made approximately 75% return on their investment.

StartEngine

StartEngine was founded in 2015 as a crowdfunding agency. StartEngine works with companies across many industries, including but not limited to UAVs, food products, renewable energy, collectibles, and more.

 

StartEngine's most notable exit was a KnightScope that went to IPO. However, a few weeks after Knightscope's IPO, it was trading at a much lower valuation than its latest round on StartEngine. It should be noted though that Knightscope's early investors on StartEngine most likely have realized great returns, it was investors in the last few funding rounds who most likely lost money.

 

Another notable exit was Digital Brands Group which exited through IPO.

 

Osurv got acquired by Tan Capital Partners.

 

Another company called Smoke Cartel started trading on OTC; however, it has very little liquidity so it probably should not count as a success story.

 

Netcapital

Netcapital is an equity crowdfunding platform that offers a wide variety of investment opportunities, including pre-IPO.

 

We could not find any companies that exited on Netcapital, however, there are a few interesting companies that closed investment rounds on Netcapital.

 

EnergyX for example raised a few rounds on Netcapital and then since got commitments for $450M. This is probably the largest in the history of crowdfunding. If we look at the single biggest commitment for a startup that raised crowdfunding, Netcapital likely will be a leader.

 

GenesisAI raised on Netcapital around $4M previously and is currently raising its Series A round on Netcapital. GenesisAI has a stellar team (Harvard Ph.D., ex-Salesforce Engineer) and has been generating revenue. Currently, they have approximately 2,000 users. GenesisAI is aiming to build a foundation for Artificial General Intelligence.

 

Republic

Republic is a crowdfunding platform that offers equity crowdfunding and ICO investing.

 

Republic has multiple companies that raised very large rounds after being funded on Republic. However, based on our research there are only two companies that exited on Republic. According to Crowdfund Insider, Trustt which raised around 100k on Republic got acquired and investors were able to generate 1.17x returns. This is not a big return, however, if we take into account the acquisition that happened around 3 months after the Republic round got closed, this is an excellent return.

 

Another exit came from the company Nanno. It got acquired by Call Emmy. However, it seems like the investors on Republic did not realize any returns because Nanno refunded all the investments.

Wefunder

Wefunder is an equity crowdfunding platform that was founded in 2011. Wefunder has funded over 100s companies and has had a few notable exits.

 

The most prominent and probably the biggest exit in the crowdfunding space was a company funded on Wefunder - Ginkgo Bioworks. Ginkgo went on an IPO at around $20B valuation. It currently (as of November 2022) has a market cap of around $4.5B.

 

Importance of risk

 

Returns are an important part of investing. However, another equally important one is risks. For example, generating a return of 10% when the chances of a total loss of investment were 90% is inferior to generating a return of 10% when the chances (risk) of a total loss of investment were 20%. In a subsequent article, we will provide an analysis regarding what percent of investments in each of the crowdfunding platforms resulted in exits.

 

Conclusion

Crowdfunding is a new and emerging asset class. It offers great opportunities for both investors and startups. However, it is important to understand that crowdfunding is a high-risk investment.

 

Before investing in any crowdfunding platform, it is important to do your own diligence and research. We believe that the most important thing an investor can do is to invest in a crowdfunding platform that he/she understands.

 

In our opinion, the five crowdfunding platforms that offer the best opportunity for investors are StartEngine, Republic, Netcapital, SeedInvest, and Wefunder. These platforms have funded some of the most successful companies in the crowdfunding space.

 

Disclaimer: This is not financial advice. Please do your own diligence before investing in any crowdfunding platform.



  • home
    • ai marketplace
    • business model
    • problem
    • team & vision
  • community
    • Top Article
    • articles & news
  • product
    • popular cases
    • popular apis
Important Information

GenesisAI Corporation, a Delaware corporation (“GenesisAI”), operates the www.genesisai.io website (the “Site”) and its subdomains. GenesisAI is not a broker-dealer or investment advisor.


You should speak with your financial advisor, accountant and/or attorney when evaluating any securities offering. Neither GenesisAI makes any recommendations or provides advice about investments, and no communication, through the Site or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. The Site may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration.


From time to time, GenesisAI may raise funds through one or more offerings of securities conducted through the Site pursuant to a public offering exemption from federal securities registration requirements pursuant to Regulation A, under the Securities Act of 1933 (the “Securities Act”). The current offering circular for GenesisAI’s current public offering pursuant to Regulation A is available by emailing the Company at invest@genesisai.io; via the Site under the “Home” heading; or accessed online here: https://www.sec.gov/edgar/browse/?CIK=1797609.


Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance is no guarantee of future results. Investments such as those on the Site are speculative and involve substantial risks to consider before investing, outlined in the respective offering materials and including, but not limited to, illiquidity, lack of diversification and complete loss of capital. Key risks include, but are not limited to, limited operating history, limited diversification, risk of asset damage and lack of voting rights. Also, the adverse economic effects of the COVID-19 pandemic are unknown and could materially impact your investment in our securities. Investors should carefully review the risks located in the respective offering materials for a more comprehensive discussion of risk.


During any such time that its offering circular has not been qualified by the Securities and Exchange Commission (the “SEC”), from time to time the Company may conduct “testing the waters” campaigns to gauge market demand from potential investors for an offering under Tier II of Regulation A of the Securities Act. No money or other consideration will be solicited, and if sent in response, it will not be accepted. No sales of securities will be made or commitment to purchase accepted until qualification of the offering circular by the SEC. An indication of interest made by a prospective investor is non-binding and involves no obligation or commitment of any kind. Any offer to buy securities may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date. No offer to buy securities can be accepted and no part of the purchase price can be received without an offering circular that has been qualified by the SEC, which we urge prospective investors to read carefully.


From time to time, GenesisAI will seek to qualify offerings of securities under Regulation A. For offerings that have not yet been qualified, no money or other consideration is being solicited and, if sent in response, will not be accepted. No offer to buy securities of a particular offering can be accepted, and no part of the purchase price can be received, until an offering statement filed with the SEC relating to that series has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC. An indication of interest involves no obligation or commitment of any kind.


Investment overviews presented on the Site may contain summaries of the purpose and the principal business terms of the investment opportunities. Such summaries are intended for informational purposes only and do not purport to be complete, and each is qualified in its entirety by reference to the more-detailed discussions contained in the respective offering circular filed with, and qualified by, the SEC.


GenesisAI does not offer refunds after an investment has been made. Please review the relevant offering materials and subscription documentation for more information.


An active trading market for any GenesisAI series interests may not develop or be sustained. If an active public trading market for GenesisAI securities does not develop or is not sustained, it may be difficult or impossible for you to resell your securities at any price. Even if an active market does develop, the market price could decline below the amount you paid for your securities. There is no assurance that the GenesisAI platform will provide an active market for resales of GenesisAI securities. Further, without the GenesisAI platform, it may be difficult or impossible for you to dispose of your securities. If the market develops for any GenesisAI securities, the market price of such securities could fluctuate significantly for many reasons, including reasons unrelated to performance, reasons relating to reports by industry analysts, investor perceptions or announcements by competitors regarding their own performance, as well as general economic and industry conditions.


For additional risk factors and disclaimer information, you can review our communications disclaimer at genesisai.io or invest.genesisai.io and our offering circular on file with the SEC.

Contact Us
© 2024 GenesisAI, All rights reserved
Marketplace Sign Up Mail Server Sign Up
we’re here
GenesisAI