Secret of Building a Successful FinTech Startup in 2016 [Part 2]

As a continuation of our quest to build a successful FinTech startup in 2016, part two will cover the following topics:

  • How to get funded
  • How to comply with regulations without a lawyer
  • Insurance
  • Operational efficiency with the right APIs
  • Leaders to watch

How to get funded?

While accelerators provide certain financial support, upon graduation from programs, startups are forced to thrive to gain further funding. Some of the options are crowdfunding, personal loans and, of course, VCs.

Here are some of the online crowdfunding platforms for young entrepreneurs to start the big journey:

CircleUp is a leading equity-based crowdfunding platform where accredited investors have free access to direct investments in high-growth consumer product and retail private companies that were previously difficult to identify and access. The platform has enabled an online transaction capability to make investments.

Launched in 2005, EquityNet is a multi-patented platform that includes over 100,000 individual entrepreneurs and investors, incubators, government support entities and other members of the entrepreneurial community to plan, analyze and capitalize privately-held businesses.

Fundable is a crowdfunding platform that offers both rewards-based and equity-based campaigns for small businesses. The company charges a fee of $179/month for services. The funds raised are not charged with fees, but transaction fees apply. The platform offers tools for assisting a successful campaign. Startups using the platform can offer investors either a reward or equity in return to invested funds. If the goal is not reached, the investments are returned.

MicroVentures is an equity crowdfunding website that offers investments to early-stage companies. MicroVentures connects accredited investors with startups, businesses and services looking to raise funds or participate in select secondary market opportunities. MicroVentures has raised almost half a million in total funding. MicroVentures charges a commission fee of 5% from investors and 5% commission from startups.

Onevest provides an investing platform that connects early-stage tech companies with accredited investors. Onevest charges a 7.5% commission fee on funds raised through its investor network. Additional fees are incurred for due diligence, marketing and legal. Onevest counts more than 72,000 entrepreneurs and has helped startups raise more than $23 million.

SeedInvest is an equity crowdfunding platform that connects investors with startups. Through SeedInvest, startups have accumulated more than $1 million in funding from Avenue A Ventures, Krillion Ventures, Scout Ventures, Great Oaks Venture Capital and others. 500 Startups is SeedInvest’s main client. SeedInvest charges $250 per month as technology fee and 7.5% fee for successful campaigns. In addition, the company takes up to $3,500 in due diligence, escrow and legal fees for successful campaigns. The platform has a strict screening process and startups should expect to invest time before they are approved or rejected.

FundersClub is an online venture capital firm that provides online financial matchmaking services. About 10% of the money that investor members invest is set aside within a fund to cover legal and accounting costs as an administrative fee.

Wefunder is a crowd-investing platform that offers capital-raising services. The platform connects more than 48,000 investors that have funded 106 startups with over $14.5 million. Wefunder lets anyone to invest as little as $100 in 30 seconds. The platform is globally accessible for international accredited and unaccredited investors, but with limits on investments depending on income level.

Investable allows professional investors to co-invest in best-in-class technology startups. Platform members can access early-stage venture investment opportunities to pick the startups they wish to invest in. Launched by the team behind NEST, a Hong Kong-based incubator, the platform encourages startups to look for investors who can also serve as mentors and advisers. The platform is available on an invite-only basis for investors.

Crowdcube is one of the leading investment crowdfunding platforms from the UK. The company enables anyone to invest alongside professional investors in startups, early-stage and growth-stage businesses through equity, debt and investment fund options. The platform has more than 235,000 registered users looking for interesting investments. It’s free, quick and has no obligations. More than $180 million has been invested through the platform across 330 startups.

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