Equity Crowdfunding Platforms – Follow The Money?
Since the dawn of equity crowdfunding, equity crowdfunding platforms quickly fell into two decisive categories; winners and losers. This blog could be a graveyard for dead platforms but today let’s celebrate the liveliness of the two biggest equity crowdfunding platforms; StartEngine and WeFunder.
It should come as no surprise to anyone we know both of them well. Heck we know ALL of them well.
This article is not an endorsement of a specific platform but rather an analysis of the two biggest platform players.
StartEngine – Rapidly becoming a household name among equity crowdfunding platforms.
Mr. Wonderful’s handsome mug adorns CNBC, Fox Business News, NewsMax and other national news networks all day every day pitching StartEngine. They broke new ground with their TV advertising and their overall strategy. Their daily ad spend on television alone is as high as it can get. Then there’s the never ending flow of Facebook ads.
All of this ad spending makes their latest round of funding understandable…
… they need to pay for their aggressive ad spend. All said and done all of these advertising dollars chalk up to StartEngine with 150 active equity crowdfunding campaigns as of the date of this article. A part of me can’t help but wonder why the little guys (I mean the VERY little guys) even bother trying.
WeFunder – Different Strategy Yielding Nearly Double the Results
Coming in with 276 active campaigns as of April 18, 2021 with ZERO television advertising, WeFunder is clearly on to something. The question that begs asking is — why are they raising more capital too?
Judging purely by the numbers seen from the 30,000 foot view, WeFunder is booking nearly double the revenue as StartEngine with far less money spent on advertising so what are they raising money for? Their platform is mature, the revenue is obviously there so what’s the purpose of this deal?
Esteemed Crowdfund Buzz colleague Irwin Stein, Esquire and i often have similar conversations. StartEngine’s capital needs are clear; they’re paying $400,000 per year to boast Kevin O’Leary as a spokesman plus all that TV time they’re buying every day to air the dapper shark’s commercials.
WeFunder’s need for capital is far lass clear. While we have questions as to why these two giants among equity crowdfunding platforms are doing everything right, it’s impossible to dismiss all of the questions surrounding their desire fore more cash.