How long does Equity Crowdfunding Take?
Shared by Miriam_Dorsett · 114d ago · 15 comments

I found this article useful as I'm starting to explore and compare funding options.

AndyDent-Touchgram · 112d ago

Birchal is the dominant crowdfunder in Australia.
They say 9-12 week process starting with 3-4 weeks of prep
https://help.birchal.com/en/articles/5190303-the-birchal-process

Then they deliver the money.

We can usually pull over 85% of the funds within 2 weeks of the offer closing, and the remainder of the funds about 4 weeks after that. (Note that Australia has a 5 day cooling-off period for retail investors, which is part of that initial 2 weeks.)

They take 6% of a successful raise plus $2,800 in costs.
https://docs.google.com/document/d/1faCwRxNzYg87mi8_zReADr7AkIjDceElIOVFa4tF-rU/edit

NFT-gal · 112d ago

Intense prices. I wonder how this would compare to legal fees incurred by doing it yourself with an experienced crowdfunding lawyer...

AndyDent-Touchgram · 111d ago

The point is they have the marketing reach with a bunch of people who are doing this across multiple startups. as well as marketing experience running many campaigns.

Typical advice from people like Jason Calacanis in his book Angel is to diversify. That applies to crowdfunding sites as well as aggregators like AngelList.

How much would you pay for a great marketing campaign reaching 10K people who have already proven their willingness to invest?

Depending on the jurisdiction, there are possibly also licensing issues. You can only offer a crowdfunding deal in Australia if licensed by ASIC. Similar in the USA - SEC-registered entity https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfunding

NFT-gal · 111d ago

Oh very, very interesting. Super helpful, thanks.

And that frame of mind - that their real benefit is marketing - makes sense. Have you ever considered the crowdfunding route?

AndyDent-Touchgram · 110d ago

I've considered both equity crowdfunding and also funding some special art packs on Kickstarter, as much for the marketing benefit as the money. Big focus right now is on wrapping current version with the new engine - have spent the last week teasing out some fine bugs revealed by my additional test frameworks. Once I've built a bit of traction with something more usable, will be seriously looking at crowdfunding.

NFT-gal · 110d ago

Awesome!

Miriam_Dorsett · 110d ago

so many options!!

Sandy-ONeill · 113d ago

If I remember correctly from last time checking, WeFunder takes anywhere from 3-6 weeks, start to finish. I say that with 50% confidence, though. They have extensive FAQs.

The odd thing about their service is they take 7% cut of the round. Which to me seems massive.

Miriam_Dorsett · 113d ago

Si, pero you can run your campaign for longer if you want I think. I had no idea they took 7%. That is wild. What for? LOL
I have heard that WeFunder is nicer to work with vs some of the other options out there...

NFT-gal · 112d ago

Great question lol I guess just the value and ease of the infrastructure, which wouldn't have been there to begin with.

It'd be interesting if a company like WeFunder became a VC crowdfunder. I.e. they have the option to take equity in the business itself, as opposed to generating revenue for operational fees.

On their site, it says $350M has been raised with crowdfunding. If they take 7%, then it's a $20M+ business currently. Depends on the success of the companies their servicing, but I bet long-term their revenue would be higher for equity exchange.

Miriam_Dorsett · 110d ago

You bring up good points above as well. There is a lot to learn and dive into! I'm taking it one step at a time.

manojranaweera · 113d ago

Hi Miriam

What's your tech product startup?

Miriam_Dorsett · 113d ago

Hi! Thank you so much for the question so I can shamelessly plug myself hehe

I'm building QUOKA the anonymous text message club for founders and entrepreneurs. It's available in the USA and CA for now. I just came out of private beta and am in my soft launch. <3 What about you? What are you working on? Are you raising or plan to?

manojranaweera · 112d ago

oh me, I run https://skilledup.life - we hit our first-year target of onboarding 1,000 volunteers. Now trying to work out the next phase. I don't need capital - I'm a lifelong bootstrapper. But now armed with 1,000+ Volunteers.

Most people waste time trying to raise investment. Most tech startups are not investible. I don't think mine is investible right now, even if I wanted capital.

Have you got a URL for your startup? Google does not help me find yours Miriam.

Miriam_Dorsett · 111d ago

I'm a bootstrapper too! This will be the first time I go for funding. It's at https://chibur.info/quoka
Looking to build relationships, understand the process, and get my numbers in order first.