Are you the owner of a business or startup interested in equity crowdfunding?
If so, you’re not alone. Entrepreneurs across the country are turning to the top equity crowdfunding sites to raise capital for their business in exchange for future profits.
And leading the pack for equity crowdfunding platforms are WeFunder and StartEngine.
In this article, we’re taking you through some of the key differences between the two platforms so that you can decide which platform is best for your offering.
It’s time to raise a big round of funding from the crowd! Let’s dive in.
WeFunder vs. StartEngine Statistics
When it comes to comparing the two equity crowdfunding platforms head-to-head, it’s important to look at a couple of key indicators of health on the platform. Let’s do just that.
Active Investors in 2020
WeFunder: 75,417
StartEngine: 87,026
StartEngine had the slight edge over WeFunder in terms of unique investors that participated in Reg CF offerings as of 2020.
Interesting to note here: Republic (another equity crowdfunding platform) actually has both StartEngine and WeFunder beat in this category, with 90,801 active investors.
Avg. Check Size in 2020
WeFunder: ~$950
StartEngine: ~$800
While StartEngine may have more active investors on the platform, the users on WeFunder tend to write higher checks — which obviously leads to higher funding totals.
When building out your own campaign, it’s important to remember the types of investors that you want to target. Non-accredited investors (which account for 80% of all equity crowdfunding investment participants) are great for increasing the number of backers, but their check sizes tend to be smaller.
Total Capital Raised in 2020
WeFunder: $70,891,332 (33.7% of all equity dollars raised)
StartEngine: $68,596,080 (32.6% of all equity dollars raised)
WeFunder has a slight edge over StartEngine in this category. However, the gap is pretty minuscule; so you won’t want to split hairs on this.
On both platforms, you’re going to have the chance to raise some pretty significant capital if you have a compelling offering and run your campaign with best practices.
Average Campaign Raise in 2020
WeFunder: ~$210,000
StartEngine: ~$425,000
Clearly, StartEngine has a pretty significant average campaign raise when compared to WeFunder. This definitely shouldn’t be ruled out, but there could be some explanation behind the statistic.
First of all, WeFunder had about twice as many campaigns launched on the platform when compared to StartEngine.
Additionally, StartEngine had some pretty huge campaigns which yanked that average way up.
Again — you’ll have the chance to raise millions on both platforms. The nature of your pitch will be a much larger factor in determining the success of your campaign as compared to macro-level averages.
WeFunder vs. StartEngine Securities Offered
The types of securities that each platform tends to offer are a key difference between StartEngine and WeFunder.
Generally, WeFunder prefers SAFE offerings, also known as simple agreements for future equity. This offering serves as an agreement between investor and company that provides equity rights in future profits without determining the specific price per share at the time of initial investment.
StartEngine, on the other hand, specifically avoids offering SAFEs, although they do allow for some convertible notes.
Instead of SAFEs, most of the offerings on StartEngine are common stock — meaning that investors are actually owners in the company that elect a Board of Directors and are able to vote on corporate policies.
You’ll have to do your own research to determine which offering is best for your project in particular. When making these considerations, make sure you’re thinking long-term, as it will have a huge impact on the future structure of your company!
WeFunder vs. StartEngine Fees
The fee structure for WeFunder and StartEngine are very similar, though WeFunder is slightly more company-friendly. Neither platform takes a fee unless you are successful when you raise, and it’s free to create an account.
Generally speaking, StartEngine’s fees are a little bit more intensive:
StartEngine Fees
- 7% of total capital raised
- 2% additional for what is raised in equity
- $10,000 collection of deferred revenues when the offering is complete
WeFunder Fees
- 7.5% of total capital raised
Just looking at the numbers, you’ll notice that StartEngine is going to take a larger cut of your raise for most campaigns. WeFunder also boasts a best price match offer, so if you can find a platform that has a more favorable fee system, they’ll give you the same structure.
Should You Use StartEngine or WeFunder?
Here’s the deal — both platforms offer an incredible opportunity to raise funds for your startup venture. You’ll want to consider:
- Statistics for each platform
- The type of security you want to offer
- Fee structures
Depending on your company goals, both equity crowdfunding sites are a great option. So while we’d love to tell you what to do, you’ll just have to decide for yourself!
Here at CrowdCrux, we know that this can be a little bit complicated. Check out some of these resources for your additional research:
- What is Equity Crowdfunding?
- 6 Equity Crowdfuning Pros and Cons
- All About StartEngine
- All About WeFunder
Feel like you need some additional guidance?
Book a coaching call with the founder of CrowdCrux Salvador Briggman. He can offer you expert insights, and if you’d like, discuss if your project is a good fit to work with our experienced marketing team.
Not ready to book a coaching call yet? No problem. Stay in touch with us:
- Subscribe to the once-weekly newsletter
- Check out the Crowdfunding Demystified Podcast
- Subscribe to the Youtube Channel
- Find the book: Equity Crowdfunding Explained
We hope that this article was helpful for you in sifting through StartEngine vs. WeFunder! Use CrowdCrux as your trusted resource throughout your equity crowdfunding journey.
