Fundable has helped entrepreneurs, early-stage companies, and business models to raise over $615 million. What else do you know about its crowdfunding platform?
Fundable is considered as a venture investment type and equity crowdfunding platform for startup and accredited investors only. The platform operates with different sectors, industries, and businesses such as retail, health care, agriculture, and more.
Fundable and similar platforms like Zirtual and Clarity are part of the startup.co series. That explains the high fees, minimum amounts, and why it only accepts accredited investors.
In today’s review, we will break out the confusing parts about Fundable. Including its offerings, service, potential rewards or returns, and its due diligence process.
The company overview table
|
Service |
Fundable |
|
Founded |
2012 |
|
Investment type |
Venture |
|
Sectors |
Agriculture, Clothing, Fintech, Healthcare, Restaurants, Retail, Travel, VR and wellness, |
|
Minimum investment |
Minimum $1000 |
|
Audience |
Only accredited investors |
|
Investors fees |
No fees $0 |
|
Due diligence process |
No record for diligence process. Listed companies are offered under SEC Reg D |
|
Securities offered |
Equity or convertible debt |
|
Investors resources |
Company documents, blogs and research section |
|
Pros |
|
|
Cons |
|
Types of investment that Fundable offers
Fundable isn’t just a Bootstrap venture. It’s part of the Startup. Co companies, which make it one of the largest crowdfunding companies in the world. Fundable was created for the sole purpose of helping seed-stage companies and businesses to raise capital and fund their projects.
Fundable offers its listed companies two types of investment options, donation crowdfunding, and equity crowdfunding. Like the vast majority of crowdfunding platforms, this one also lists and selects early-stage companies which could be risky for accredited investors.
Still, the main concern of most founders that want to be registered in the Fundable platform is the upfront price tag they offer. One of its conditions, a startup must pay an upfront payment, like you are paying money to raise money.
Down below we present some of the main key features and offers that Fundable offers to its accredited investors
Reward fundraising campaign: the first option to raise funds through Fundable is to sell products and services to consumers. Startups can render services and products related to their industry in exchange for support, usually the rise from $1000 to $50000
Equity fundraising rewards: In the second option, founders and early-stage companies must offer equity shares to accredited investors to raise funds. We have seen that some companies managed to raise funds by millions and millions of US dollars.
Backer commitment: Bakers consider it as an essential foundation for support and raising funds for all companies. They could be potential consumers, users, or investors. Fundable ensures your services will get the necessary attention from bakers. That will boost your funding and support the company projects.
All or nothing: Large Crowdfunding platforms like WeFunders, SeedInvest & Fundable have a reputation to maintain and strict requirements to full fill. That explains why they accept only less than 10% of the application they receive. Fundable works the same.
If you want to get your company listed on the platform your record and results will either be good to go or not. Only companies that serve the company plans will get listed.
Flexible deadlines: Almost all crowdfunding platforms have a minimum and maximum deadline for raising funds. With Fundable you don’t have to burden yourself with deadlines and time racing. The platform listed every day unique campaign rewards or equity. That comes with the flexibility of investing and fundraising.
What do you get when investing with Fundable?
As stated previously, Fundable offers both equity shares and rewards services, which makes it a combination of equity and rewards crowdfunding platforms. Listed companies will have to choose one of the two available options. Equity shares for the accredited investors to raise funds from $50.000 to $10 million. The positive thing about Fundable is that it doesn’t ask for any fees from its inventors, but the campaign is another topic. Companies who want to be listed on the platform must agree to pay extra charges for campaign services.
However, while it seems tempting to put your money and invest in early-stage companies, Fundable does not guarantee any returns, shares, or rewards. Your gains totally depend on what company you invest in.
How does Fundable make money?
One of the pros of investing in Fundable is the no-fee policy, which means investors can sign up for free and start investing with no fee. That leaves us with one source of money, the listed companies. To raise funds with Fundable there are monthly fees to pay, specifically two types of fees.
- Monthly fundraising fee
- Merchant processing fee
Starting with the first option, the monthly fundraising fees, the listed companies are legally required to pay monthly fees estimated at $179 per month. The fees include all the company activities such as the creation and business management.
The second option is for companies that run a reward campaign to raise funds. Usually, the funds come from the merchant or the consumer debit card. The merchant processing fees are estimated at 3.5% per transaction he makes.
Fundable potential returns and cash flow
Fundable founders and management made it specifically clear that the platform primer focus goes internally to its companies’ campaigns. Yet, even if you want to and build a portfolio with some of the registered companies it will still be risky.
Generally speaking, seed-stage investments are at risk. They could lead to money loss and disturb your financial situation. Whether you are investing in Fundable or WeFunders.
It’s recommended to diversify your portfolio with different industries and businesses. For example, Fundable works with different sectors such as agriculture, health care, retail, restaurants, and more.
You as an investor must carefully select what companies to invest with and remember to never invest with more than you can afford.
That will not deny the fact that early-stage investments may turn very profitable over the years. Some investors had built great wealth by investing with seed-stage companies. It’s a speculative game, and only the smart ones win.
The breadth of offerings on Fundable
Fundable offers a wide range of different industries and businesses to raise funds through the platform. For example, a media seed-stage company, goes by the name of Marbyl, has recently joined the platform and since then raised $1.800.000.
Moving to the technology sector. A newly listed company goes by the name Revolution mining Corp, made a huge success and raised $5 million from backers.
There is more and more, the health care sector, Retails, and other sectors. It only indicates that Fundabel offers and selects different businesses to list on the platform. A wide selection like this offers the investors multiple investment options and opportunities.
Nevertheless, we found a negative point with the Fundable selection process or offers. The platform only accepts companies that have a US presence. Or at least its headquarters is inside the US. Otherwise, your company won’t get listed pr featured.
Regulatory framework and due diligence expectations
Going through different documents, blogs, and reviews we didn’t find anything about Fundabel’s due diligence process. It appears that there is no due diligence process involved in the selection process. So how does the company select and list the companies?
Entrepreneurs, founders, and business owners can create a free account or profile on the platform. It will be an extensive company profile, all the needed information must be filled in. Including, founders, products, business models, and more.
The Fundable team will view each company profile, and based on the given information, the team will give its final decision.
If your company gets accepted then you can move trade and select the campaign type to start funding.
Additional note, all investment on fundable offered by the regulation of the SEC and The Reg.
Conclusion
Fudabell offers investment opportunities under the regulation of the SEC and Reg. Plus, only accredited investors can invest and backer on the platform. Listed companies on the platform have two funding options, the reward-based funding option, and the equity option.
Investing in startup companies is considered a high investment strategy because there are no guarantees on their performance.