Companisto, a German equity-based crowdfunding platform, has so far raised €4.5 million ($6.25 million) for the 25 startups it’s chosen to take on. Now it’s expanding with an English-language version that will allow submissions from startups anywhere in Europe, and investments from anyone around the world.
The expansion comes little over 3 months after Seedrs, a British rival, became the first equity-based crowdfunding platform to expand across Europe. Such platforms give the investor equity in the company, rather than one-off “perks” in the style of Kickstarter or Indiegogo.
Like Seedrs, Companisto tries very hard to be VC-compatible – that is, it sets up its terms and conditions in a way that allows companies funded through its platform to easily go on to take follow-up venture capital financing. Co-founders David Rhotert and Tamo Zwinge (pictured) are both lawyers, and Rhotert told me careful wording meant Companisto was already “co-financing with internationally known investors.”
Companisto’s other big selling point is the speed with which investors can sign up. Zwinge claimed this was a 3-minute process that still managed to present the full conditions of the investment up-front – with some European rivals, you have to wait for paper contracts before you fully know what you’re signing up for.
Investors can throw in anything from €5 to €100,000, and so far 15,600 have done so. Success stories so far include frozen yoghurt chain Wonderpots and snack delivery service BiteBox, both of which have raised €500,000. There’s no cap on the amount a startup can take in through the platform.
Meanwhile, equity-based crowdfunding platforms that are based in the U.K. face tighter regulations in order to protect people who find the whole online investing thing tempting beyond their means.
Last week the Financial Conduct Authority said platforms would need to carry out an “appropriateness test” to check that investors are parting with no more than 10 percent of their investible assets. This will no doubt slow down the investment process for platforms based in that country, but platforms such as Funding Circle and Seedrs welcomed the move, pointing out that it represents official support for the concept of equity-based crowdfunding.