CrowdSourceFunded

Summary

CrowdSourceFunded is an SEC-registered Title III Funding Portal using Reg CF to offer crowdfunding investments in startups and small businesses to anyone. Selection is very limited, there are no backers for any current investment, and overall the site feels like a bit of a ghost town.

  • Website: https://crowdsourcefunded.com/
  • Investment Types: Startups/Business Financing
  • Security Types: Convertible, Debt, and Equity
  • Sectors: ECommerce, Materials, and Restaurants
  • Minimum Investment: 250
  • Open to all investors

Pros

  • Low-minimum investments
  • Open to non-accredited investors

Cons

  • Startup investments are inherently high risk, low liquidity
  • Very limited selection
  • Sparse investor information for offerings
  • No backers to date for either open investment
  • Website content and investor education is thin

CrowdSourceFunded logo

Overview

CrowdSourceFunded is a Chicago-based Title III Funding Portal registered with the SEC and governed by FINRA.

Types of investments CrowdSourceFunded offers

CrowdSourceFunded offers investments in startups and growth-stage companies. Earlier-stage startups are generally riskier, though may offer the potential for a greater return in the long run (that is, if they return anything at all).

What do you get when investing with CrowdSourceFunded?

Current offerings include debt and convertible notes. All of the offerings on CrowdSourceFunded are direct investments, rather than through a special-purpose vehicle like an LLC.

CrowdSourceFunded fee structure

CrowdSourceFunded does not appear to charge a fee to investors, but as with many Title III Funding portals, charges offering companies to list their business.

Potential returns and cashflow

Investments on CrowdSourceFunded are high-risk investments in startups and growth companies. There are no interest or dividend payments, and except under very limited circumstances, the investment must be held for at least 12 months, with minimal expectation of any market after that period. Most startup investments lose some or all of their value.

Regulatory framework and due diligence expectations

CrowdSourceFunded is an SEC registered Title III Funding Portal, which means they are subject to a range of rules and obligations around investor education and due diligence. All companies offering investments on CrowdSourceFunded will have been a minimum of background checks of key officers and owners. Prospective investors also have access to online forums to talk with other investors, and an online channel for asking questions of the company raising funds (and viewing answers of prior questions from others).