It was a banner year of growth for the crowdfunding industry in 2014 as several record-setting rewards-based and equity-based crowdfunding campaigns took place.
Each year the bar continues to rise, as the overall crowdfunding industry is estimated to grow to nearly $10.9 Billion in total funding in 2015, up from $1.5 billion in 2011.
This post highlights 10 of the top equity crowdfunding campaigns that raised equity funding for startups in 2014. For clarity, this list does not include rewards-crowdfunding campaigns where participants don’t invest, but rather donate or pre-purchase products or experiences on sites like Kickstarter and Indiegogo.
Equity crowdfunding is the newest growth driver in the crowdfunding industry, having just kicked off a little over a year ago with the passage of Title II of the JOBS Act. Since then, online equity investment has grown briskly in the first year from zero at the starting gun to an estimated $217 million in investment committed online.
Yet, while people often talk about the growing number of crowdfunding platforms, a lion’s share of funding has came through a smaller number of the few top crowdfunding sites.
Here are 10 of the Top Equity Crowdfunding Campaigns of 2014:
PonoMusic – Neil Young’s company that first ran a $6.2 million rewards-based campaign on Kickstarter and pre-sold 15,000 of their PonoPlayers. Pono then turned to Crowdfunder to offer equity to their community, later closing a total financing of $4 million after many more millions in interested international investors had to be turned away due to regulatory restrictions.
Nomad – a company that designs and manufactures modern smartphone accessories. The company raised $1.2 million with the help of consumer-packaged goods platform Circle Up, and a feature appearance on a CNBC crowdfunding show.
Social Rewards – a social loyalty startup that lets users earn rewards from companies they love by sharing the company on social media. The company raised $1 million from a variety of investors on Crowdfunder and angel investor Barbara Corcoran of Shark Tank.
Plum – this hardware company allows people to control and monitor their lights and electricity via smartphone from anywhere in the world. Since launching last March, they’ve sold over $550,000 in pre-order units and closed a $760,650 equity funding round.
GoCoin – as a startup in the red-hot Bitcoin space, GoCoin allows merchants (small businesses) to accept payments via Bitcoin, and recently kicked off a successful $1.2 million funding round on the heels of their announcement that they had been chosen as a select Paypal payment partner.
RAEN – a high-end sunglass business that raised $825,000 from 8 investors with the help of the Circle Up platform.
Bitvore – a startup that puts the power of big data tools in the hands of everyday people and businesses. The company raised a $4.5M Series A round in a creative way, with nearly $1 million of it coming organically through a few different equity crowdfunding platforms, of which the largest portion of funding came through Crowdfunder, then AngelList.
Titin Tech – the company makes weighted compression gear for workout training first and raised $1 million with the help of mixed crowdfunding platform Fundable.
Atlas Wearables – followed the crowdfunding path for both rewards-crowdfunding and equity, raising $1.1 million for it’s smart fitness tracker.
iFunding – this real estate equity crowdfunding platform chose the route of equity crowdfunding itself through the Crowdfunder platform. Their campaign quickly broke through their initial goal of $1 million in just over a week.
Successful Campaigns & Equity Crowdfunding’s Future
For startups looking to understand how to run a successful equity crowdfunding campaign and raise startup funding online, one of the first steps is choosing the right platform from among the top crowdfunding sites.
In 2015, expect the exponential growth of equity crowdfunding to continue as accredited investors continue to move their investment activity online.
Meanwhile, some startups seeking funding are still waiting for Title III of the JOBS Act, which will allow anyone (both accredited and non-accredited investors) to invest in startups.
As this happens, a new class of investors will come online who have the potential over the long term to grow larger than the existing VC or angel investor markets, given the sheer numbers of potential investors who could participate.
In the meantime, startups can compare equity crowdfunding vs. rewards-crowdfunding and use the one that fits their needs.