Accessibility in Online Startup Investing - KingsCrowd

July 21, 2021

Accessibility in Online Startup Investing

When the JOBS Act created the online private markets, it made startup investing accessible to everyone. Where before only venture capitalists and very wealthy individuals could access this asset class, today anyone can invest in startups. But accessibility is more than just a function of regulation — it’s also based on round characteristics. Perhaps one of the most relevant characteristics when it comes to accessibility is the investment minimum. This is the smallest dollar amount an investor can commit to a round of fundraising. In an effort to help investors identify platforms with deals that fit into their investing budgets, we broke down investment minimums on some of the most popular platforms. This data is representative of Regulation Crowdfunding and Regulation A deals that opened in 2020. For this chart we split investment minimums into two categories: $250 or less (<=$250) and more than $250 (>$250).

Investment Minimum Counts by Platform (2020)

The majority of raises on most platforms had investment minimums less than or equal to $250. SeedInvest was the major exception to this. Many SeedInvest deal minimums are set at or around $1,000, and a large number of Regulation A deals are hosted on the platform. Because these rounds often have high maximum goals and target accredited investors, the investment minimum on many Regulation A deals are set much higher than Regulation Crowdfunding rounds. Investors looking for low minimums are not likely to find many deals within their budgets on SeedInvest.

Netcapital, on the other hand, had no raise minimums above $250. The majority of Netcapital raises allow investors to invest as little as $100. StartEngine was the most evenly split platform with 174 raises with minimums at or below $250 and 101 raises with minimums above $250. Wefunder and Republic raises with minimums below $250 were the grand majority of deals on both platforms.

These investment minimums represent one of the many ways startup investing is becoming increasingly democratized. In fact, of the nearly 1,200 raises we examined for this chart, more than 650 had minimums at or below $100. Accessibility is a clear priority in the online startup investing market.

Note: all data used for the Chart of the Week comes from the KingsCrowd database and represents a snapshot of the crowdfunding market.

About: Olivia Strobl

Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.

View Olivia Strobl's articles

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