View Full Version : What are the pain points in existing “Equity Crowdfunding Platforms”?

john williams
03-15-2017, 03:43 AM
As for me, this is the most important question today. Getting quality deal flow is the main problem. It is very competitive getting quality listings as there are many groups looking to manage quality investment offerings. But what else?

03-20-2017, 05:27 AM
Hi, John!

I believe you have addressed a very broad issue. As regards to the point you raised, getting high quality investment opportunities is a challenge for most equity crowdfunding platforms. Since such form of financing is not even close to mainstream for start-ups as well as SMEs, most platforms in many cases are like ''lenders of last resort''. VCs are the first ones getting the highest quality deals.

06-21-2017, 05:04 AM
For me, I see the lack of participation and the minimum sizes of each platform's user base as the biggest pain points for crowdfunding platforms.

Which leads to the second pain point that is the education of the crowd about the availability of this method because an uninformed crowd doesn't know that they can create equity crowdfunding campaigns to raise funds for their projects or that they can invest in private equity deals, so all platforms suffer from these two. As the industry matures both these pain points will be addressed to a certain extent, and new ones will emerge.

Additionally, government regulatory bodies restricting access across the globe, have been slowing down the global proliferation of equity crowdfunding and access cross borders, so platforms that want to operate and grow on a global scale have been handicapped.

07-19-2017, 01:22 AM
It's a good post to make it clear and find out pros and cons.
I think that the first disadvantage is the high failure rate of the companies that seek investments. Another is the lack of liquidity with the multi-year time horizon. While these risks are common to all angel investing and venture capital investing and not specific to equity crowdfunding, the fact that equity crowdfunding is now open to more investors makes these risks much more present. This indicates the need to educate investors of these risks and the need to diversify investments in early stage companies.
But still the Equity Crowdfunding platforms are attractive for private small investments.

11-27-2017, 04:01 PM
Getting quality deal flow. It is very competitive getting quality listings as there are many groups looking to manage quality investment offerings.

Another pain point is having funds to keep the legal and admin resources etc to keep the platform and its offerings compliant

Handholding is another pain point. The smaller the raise the more handholding on average. This can be costly.

10-16-2018, 01:46 PM
From an investor perspective, my main concerns revolve around fraud risk and lack of transparency.