For Business Owners
Funderbeam is an Estonian equity crowdfunding platform
This independent review has been written for startups & growing companies considering using Funderbeam to raise money with equity crowdfunding.
- What Is Equity Crowdfunding?
- Best Equity Crowdfunding Sites From Around The World
- How To Crowdfund A Business Through Equity Crowdfunding – Step-By-Step
In this Funderbeam review, you will learn about:
- Funderbeam’s Attitude To Curation
- Which Companies Can Use Funderbeam
- How Funderbeam Helps Business Owners
- What Is Unique / Different About Funderbeam
- How To Raise Money With Funderbeam
Platform Website: funderbeam.com
Funderbeam’s Attitude To Curation:
Funderbeam are very strict about the sorts of companies which list on their platform. They vet the companies heavily before they are allowed to list.
They take an approach similar to venture capital, rather than “letting the crowd decide for themselves”. According a Funderbeam representative, less than 1% of companies who apply ultimately get to go live.
All businesses wanting to list on Funderbeam must pass by their internal evaluation committee, who are tasked with asking questions before they go live. This includes vetting the directors’ backgrounds, verifying the state of the company’s present financial situation, and and analyzing the company’s business plan.
Essentially, Funderbeam are looking for companies with enough track record that they can confidently show them to their investor database. This kind of ipfront curation generally leads to a higher success rate for the companies which ultimately launch a public offer.
Learn How To Succeed With Equity Crowdfunding
Equity crowdfunding offers amazing potential for startups and growing companies, but it is also a very steep learning curve.
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Which Companies Can Use Funderbeam:
Funderbeam claim they do not to have a special area of sector focus for the companies they work with. They will help everything from technology startups, to SMEs. Companies raising money on Funderbeam do not need to be super-scalable.
The main requirement is that the company is relatively understandable by ordinary members of the public. For this reason, “deep technology” is difficult (e.g. biotech), because it requires highly technical knowledge to even properly understand the business model. As a public-facing fundraising platform, Funderbeam wants their deals to be comprehensible to a wide cross-section of the populance.
Funderbeam work with companies somewhere beyond the true startup stage (as they said, “We don’t accept businesses which are no more advanced than being a mere pitch deck”.)
With few exceptions, companies need to be post-revenue. The only exceptions to this requirement are if the Funderbeam team “really like” the company. There is a qualitative aspect to their investment committee decisions.
At the other end of the spectrum, “late growth” companies are also not possible on Funderbeam. These companies are seeking €10 million or more – which is a bit more than Funderbeam are confident of facilitating.
One of Funderbeam’s main goals is to help cross-border investment. Indeed, because Funderbeam are from Estonia, they were “born global”. Originating from small economy like Estonia, they had to look outside of their own country from day 1 in order to achieve their ambitions.
Funderbeam can accept companies from around the world, but are currently focusing on the Baltics, Scandinavia, Croatia and the United Kingdom.
As of writing, Funderbeam had investors in 124 countries, but cannot accept US investors. This includes people and legal entities that are considered a U.S. person under law – including U.S. passport holders, U.S. residents, U.S. corporations, partnerships, trusts, and estates.
Raise Size Restrictions:
Funderbeam’s investment rounds tend to be between €100,000 – €2.5 million.
They have no “official minimum”, but the fact they charge a fixed €3,500 completion fee in addition to 4% of all capital successfully raised means that smaller amounts of capital end up having high fees, relative to the amount of capital which actually gets raised. Therefore, this smaller “commercial minimum” of €100,000 has emerged.
Take The Quiz – Are You Ready For Equity Crowdfunding?
Equity crowdfunding can raise 6 – 7 figures of investment for startups & growing companies, without banks or VC.
But is your company ready to launch?
This short multi-choice assessment has been created to give an indication of whether your company is fit for funding.
All answers are kept completely confidential.
How Funderbeam Helps Business Owners:
Funderbeam’s team will work actively with the companies that list with them. For example, Funderbeam will:
- Help to write the offer page text
- Give advice on how to make a better campaign video
- Provide crowdfunding PR tips
- Help with advertising retargeting
However, Funderbeam are quick to point out that the company raising the funds still need to take ownership of their own campaign. A lot of the marketing “sweat” still needs to come from the founders. They may also need to engage their own lawyer to review the various investment documentation that goes into running an equity crowdfunding round.
What Is Unique / Different About Funderbeam?
There are two main things that make Funderbeam special.
1. The secondary market they provide to the companies which raise money with them. A few other platforms have secondary markets as well, but these are typically highly illiquid, and require the platform (or the company) to arbitrarily set the price. Funderbeam is different. Fair value for secondary trading is set fluidly by buyers and sellers in an open, liquid marketplace. Admittedly, there is still not the sort of liquidity for these private companies that one would see in a public stock market, but Funderbeam’s market is still quite good.
2. The fact their investor audience is very international. They host events in many startup hubs around the world. As an annecdote, one of their events had companies from six different countries in attendance! Although listed as an “Estonian” platform, there is no single country from which the majority of their database come. They have set out to make investment truly cross-border.
How To Raise Money With Funderbeam:
Funderbeam has these three pieces of advice for companies wanting to raise money on their platform:
- Companies should do their homework before approaching Funderbeam. Why have you decided to raise capital, and why do you want to use online equity fundraising as a way of getting it? Those companies who have their reasons for funding clear in their minds stand a much better chance of passing through Funderbeam’s curation.
- Having a lead investor is will also improve your chances of getting approved to list on Funderbeam. These “lead investors” are industry experts who look deeply into the proposition, and then provide “leadership” to the crowd through investing their own money on the same terms. This provides validation to Funderbeam, because the fundraising company can point to the backing of people of “smart money” investors.
- Additionally, it is vital to be willing to put in the effort. Some founders see equity crowdfunding as a “shortcut”, whereas nothing could be further from the truth. Crowdfunding is a lot of hard work, and it takes months of strategic planning. Because a lot of the funding will come from your own networks, you need to have a contact book of interested members of your crowd, and be prepared to knock on every door to turn them into investors.
The final piece of advice is to learn from the best crowdfunding case studies so that you can replicate their success. Other companies have done crowdfunding before – you don’t need to learn from scratch. Absorb as much information as possible so that you are prepared to crowdfund!
You’ll learn how to choose the right platform, build a crowd, and raise game-changing money.
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