2,358 crowdsourcing and crowdfunding sites
As the demand for crowdfunding keeps growing, traditional investors are showing a willingness to back platforms that employ this type of fundraising.
It is impossible to tell how many of the emerging crowdfunding platforms will actually succeed. While donation-based platforms have been operating for some time, equity-based platforms have yet to sell a single share in the U.S. – they are prohibited from doing so until the SEC hammers out specific regulations around the relevant aspects of the JOBS Act. Investors’ willingness to support donation- and equity-based platforms so early in the game, however, indicates that crowdfunding is becoming a more accepted way of raising capital.
Below are a few of the platforms that were able to secure seven- and eight-digit funding in recent months.
A few weeks ago, Rally announced that it raised $7.9 million in Series A funding. Rally helps people back causes that they feel particularly close to – from forums promoting interfaith dialogue to non-profits that support families affected by infant loss. Created in 2011 by entrepreneur Tom Serres, the platform has attracted 1.5 million users to over 14,000 causes. Serres told the Wall Street Journal that he plans to use the money to scale up, which will include building up the technology and hiring new employees.
In May, SoMoLend, a peer-to-peer lending platform that operates on a hyper-localized geographic scope, secured $1.17 million in seed financing. By focusing on local businesses, SoMoLend minimizes the risk of fraud – it is, after all, much harder to fake a company that a potential lender can visit than a business that claims to be based thousands of miles away. The platform, founded in 2011 by Candace Klein, intends to use the money to “complete an alpha application of the software, create market underwriting standards, and develop a broader capitalization plan.”
IndieGoGo, a crowdfunding portal for projects and ideas, also recently made news by securing $15 million in Series A funding. According to the company itself, the $15 million funding round is the largest for any crowdfunding platform to date. CEO and co-founder Slava Rubin, along with the rest of the team, bootstrapped the start up for several years before securing $1.5 million in 2011. They will use the recently acquired capital to expand the platform’s reach, grow the staff, and potentially get into equity-based crowdfunding.