Top 10 Crowdfunding Platforms in the UK for Startups (2023)

Pros and Cons of Crowdfunding

Before we dive into the top crowdfunding platforms, let's consider the pros and cons of crowdfunding as a funding source for startups. On the one hand, crowdfunding offers startups access to capital from a large network of investors or donors, without having to go through traditional funding sources like banks or venture capitalists. Crowdfunding campaigns can also generate buzz and media attention, providing startups with exposure and market validation.

However, there are also downsides to consider. Crowdfunding campaigns can be time-consuming and require a lot of planning, marketing, and communication with investors. Crowdfunding platforms have also become increasingly crowded, making it more difficult for startups to stand out and attract investors. Furthermore, crowdfunding campaigns are not guaranteed to be successful, and if they fail, it can damage the reputation of the startup and make it more difficult to raise capital in the future. To increase your chances of success, how you run the fundraising process is important, and at Accountancy Cloud we can take the workload and stress away from you with our CFO services.

Let's take a look at our top 10 picks - Crowdfunding Platforms for UK Startups

1. Seedrs

Seedrs is a leading equity crowdfunding platform in the UK that offers startups access to a large network of individual investors. The platform allows startups to raise capital in exchange for equity, with a minimum investment amount of £10. Seedrs charges a fee on successful campaigns and offers a secondary market where investors can buy and sell shares in startups.

Pricing:

• Platform fee is 6% of total funds raised
• Payment processing fee of 0.5% of all funds raised
• £2,000 completion fee

Pros:

• Access to a large network of investors
• Equity crowdfunding can provide long-term capital
• Secondary market allows for liquidity

Cons:

• High fees compared to other platforms
• Only available to UK and European companies
• Lengthy and rigorous application process

2. Crowdcube

Crowdcube is another popular equity crowdfunding platform that allows startups to raise capital in exchange for equity. Crowdcube offers startups access to a large network of individual investors, with a minimum investment amount of £10. The platform charges a 7% fee on successful campaigns and offers a secondary market where investors can buy and sell shares in startups.

Pricing:

• Platform fee is 7% of total funds raised
• Payment processing fee of 0.75% to 1.5% of all funds raised

Pros:

• Access to a large network of investors
• Equity crowdfunding can provide long-term capital
• Secondary market allows for liquidity

Cons:

• High fees compared to other platforms
• Lengthy and rigorous application process
• Limited to UK and European companies

3. Kickstarter

Kickstarter is a rewards-based crowdfunding platform that allows startups to raise capital by offering rewards to backers. Kickstarter is popular for startups in the creative and arts industries, with a minimum funding goal of £1,000. Kickstarter charges a 5% fee on successful campaigns.

Pricing:

• Platform fee is 5% of total funds raised
• Payment processing fee of 3% + £0.20 per pledge

Pros:

• No equity or debt involved
• Large audience of potential backers
• Option to test market for new products or services

Cons:

• All or nothing funding model can be risky for startups
• Limited to specific industries and project types
• High competition for attention on the platform

4. Indiegogo

Indiegogo is another rewards-based crowdfunding platform that allows startups to raise capital by offering rewards to backers. Indiegogo offers a minimum funding goal of £500 and charges a 5% fee on successful campaigns. Indiegogo is known for its flexible funding model, which allows startups to keep the funds they raise even if they don't reach their funding goal.

Pricing:

• Platform fee is 5% of total funds raised
• Payment processing fee of 3% + £0.20 per pledge
• £25 bank transfer fee each time Indiegogo sends funds to your account

Pros:

• No equity or debt involved
• Large audience of potential backers
• Flexible funding model can be less risky for startups

Cons:

• High competition for attention on the platform
• Quality control can be an issue with some campaigns
• No secondary market for investors

5. SyndicateRoom

SyndicateRoom is another equity crowdfunding platform that allows startups to raise capital from individual investors. It's EIS fund would ask to invest on the same terms as the angel. The investment criteria includes:

• The company is UK registered and EIS eligible.
• The company is raising a straight equity round or has an equity portion of the round that our fund can invest in. For example, we can’t invest in ASAs but we can invest in an equity portion of the round that’s raised alongside an ASA.
• The company is raising at least £400,000 in their current round from other investors and within a six months period. Our ticket size does contribute towards the £500,000 minimum round size.
• This is either the first round the company is raising or the pre-money valuation in this current round is greater than the one in the most recent round.
• The pre-money valuation is less than £16m.

Pricing:

• The EIS Fund charges a one-off fee of £2,200 to companies

Pros:

• Access to a network of individual investors
• Equity crowdfunding can provide long-term
• Secondary market allows for liquidity
• Access to experienced investors who co-invest with other investors

Cons:

• High fees compared to other platforms
• Lengthy and rigorous application process

6. GoFundMe

GoFundMe is a popular donation-based crowdfunding platform that allows startups to raise capital by soliciting donations from backers. GoFundMe has no minimum funding goal and takes a 2.9% plus 30p fee on donations. GoFundMe is often used by startups for charitable causes or social impact initiatives.

Pros:

• No equity or debt involved
• Large audience of potential donors
• Can be used for charitable or social impact initiatives

Cons:

• Limited to donation-based funding
• All or nothing funding model can be risky for startups
• High competition for attention on the platform

7. Angel Investment Network

Angel Investment Network is an equity crowdfunding platform that connects startups with a network of individual angel investors. The platform offers no minimum investment amount and charges a subscription fee on for ongoing campaigns ranging from a free 14-day trial upto a pay quarterly basis at £2,499 per quarter. They also have a brokerage service which is more advisory-focused charging up to 15% on a success fee basis. Angel Investment Network also offers mentorship and support to startups.

Pros:

• Access to a network of individual investors
• Equity crowdfunding can provide long-term capital
• Mentorship and support from experienced investors

Cons:

• High competition for attention on the platform
• Limited to certain industries and project types

8. Crowd2Fund

Crowd2Fund is an equity and debt crowdfunding platform that allows startups to raise capital from individual investors. The platform offers both equity and debt investment options, as well as a secondary market where investors can buy and sell shares in startups. Crowd2Fund charges a fee on successful campaigns.

Pricing:

• Platform fee is 6% of total funds raised
• 6 to 18% APR for loans

Pros:

• Access to a large network of individual investors
• Offers both equity and debt investment options
• Secondary market allows for liquidity

Cons:

• Limited to UK companies only
• Lengthy and rigorous application process
• Limited to certain industries and project types

9. Crowdfunder

Crowdfunder is a rewards-based crowdfunding platform that allows startups to raise capital by offering rewards to backers. It has a minimum funding goal of £1,000 and charges a 5% fee on successful campaigns. Crowdfunder also offers support and mentorship to startups.

Pricing:

• Platform fee is 5% of total funds raised
• Payment processing fee of 2.4% + £0.20 per pledge

Pros:

• No equity or debt involved
• Large audience of potential backers
• Access to support and mentorship

Cons:

• High competition for attention on the platform
• All or nothing funding model can be risky for startups
• Limited to certain industries and project types

10. Crowd For Angels

Crowd For Angels is an equity crowdfunding and peer-to-peer lending platform that allows startups to raise capital from individual investors. It has a minimum investment amount and charges a fee on successful campaigns. Crowd For Angels also offers a secondary market where investors can buy and sell shares in startups, as well as a blockchain-based issuance platform.

Pricing:

• For equity: £250 application fee, 7% platform fee payable on successful raise plus a £2,000 completion fee for the legals
• For crowd bond issue: £250 application fee, 3% platform fee payable on successful raise plus a £2,000 completion fee for the legals
• For digital assets: £250 application fee, 7% platform fee payable on successful raise plus a £1,500 completion fee for the legals and £5,000 Digitalised Asset Preparation Fee

Pros:

• Access to a large network of individual investors
• Offers both equity crowdfunding and peer-to-peer lending
• Secondary market allows for liquidity
• Offers blockchain-based issuance platform for tokenized securities

Cons:

• Limited to UK companies only
• All or nothing funding model can be risky for startups
• Limited to certain industries and project types

In conclusion

Crowdfunding can be an attractive option for startups looking to raise capital, but it's important to understand the pros and cons of each platform before choosing one. The top 10 crowdfunding platforms in the UK for startups offer a range of options, including equity crowdfunding, peer-to-peer lending, and donation-based crowdfunding. Each platform has its own pros and cons, so it's important to consider factors like fees, funding model, audience, and support before making a decision. By understanding the strengths and weaknesses of each platform, startups can choose the one that best fits their needs and increase their chances of running a successful crowdfunding campaign.

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