White Label Crowdfunding 101: Part II – Players & Profits

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So you want to start a Crowdfunding Portal…

Crowdfunding 101 Start a Platform White LabelIn White Label Crowdfunding 101: Players & Profits, (Part II of our three-part series) we will introduce some of the primary white label vendors, sample sites and criteria for vendor selection to help you navigate the options.

In Part I Pros and Cons, we covered how white label crowdfunding works, benefits, applications and pros and cons versus building custom solutions.In Part III, Marketing & Ops, we will cover advice for the successful management and marketing of your new crowdfunding platform.

The Players (General Vendors)

A) Katipult (Calgary, Canada | Prague, Czechia)

Positioning: Crowdfunding software for private capital markets. Compliant platforms active in over 20 unique regulatory environments.

Roots: Custom software development house JOI Media.

“We have been building, maintaining, and iterating sophisticated crowdfunding software systems for private capital markets for over 8 years. We are a company that prides ourselves on acting as a technology partner rather than a software vendor, which is exactly what our clients are looking for.”

Key Features:

  • Complete White Label Platforms since 2008
  • Real Estate or Investment Crowdfunding (Equity or Debt)
  • Reg D 506 b and c, Reg S, Reg CF, Reg A+ and Intrastate (USA)
  • Compliant for Canada, UK, Australia, Italy, France, Africa, others
  • Robust investor, issuer and administrator tools
  • Many 3rd party integrations

Geography: US, Canada, UK, Europe, Asia, Australia, Africa, Middle East.

Applications: Real Estate Crowdfunding, Equity & Debt Syndication, Investor Management, Private placements, Listings.

Sample platforms: InvestaCrowd, IntroCrowd, BrickRaise

Other Nuggets:

“Many of our clients use the software for operational efficiencies as we streamline many pain points in both the capital raising and investor servicing processes.”

Claim track record of ROI in as little as 6 months.

B) CrowdEngine (Salt Lake City, UT)

Positioning: A white label solution without compromising customization.  Offer the most solutions in industry.

Key Features:

  • Compliance EngineTM, a unique equity crowdfunding rules engine to let clients configure as they see fit.
  • Robust equity feature set including back-office, payments, 3rd party integrations.
  • Conduct offerings for national, intrastate and international rules all at the same time on same portal.
  • Easy, step-by-step checkout and dashboards.
  • Drag and drop website builder/CMS.
  • Dedicated launch manager, tools and support.

Roots: Started in 2012.  Built ground up, scalable white label solution. Founders have online marketing backgrounds.

“CrowdEngine saw the need when we started in 2012 To provide a scalable, compliant solution to meet market demand.. which is why our technology is so superior, it’s built from the ground up as a white label platform.”

Geography: US, UK, Australia, New Zealand, Sweden, other English speaking countries.

Applications: Equity crowdfunding, Real Estate crowdfunding, Single-raise campaigns, Perks, Non-Profit.

Sample platforms: Florida Funders, CrowdOut Capital, Crowdventure

Other Nuggets:  Claim 150+ portals launched.

C) Improve In (Buenos Aries, Argentina)

Positioning: Rapid deploy crowdfunding/crowdlending functionality.

Roots: Customer software development house and certified partner for Crowd Valley API.

“The solutions we provide can me implemented in any scenario or sector (real estate, p2p lending, etc.). We believe the current markets are changing and need solutions to be implemented very fast in order to change their strategies. “

Key Features:

  • White label product for fast Minimum Viable Product (MVP) implementations since 2015.
  • User-friendly front-end web platform for acquisition and investor management.
  • Web platform connects to Crowd Valley API for compliance support and workflows.
  • Crowd Valley backend API has over 100 enterprise clients
    Wide range of programming languages and technologies offer extensive customization
  • Wide range of programming languages and technologies offer extensive customization

Geography: US, UK, South America, Latin America, other English/Spanish speaking countries.

Applications:  Investment crowdfunding (Equity and debt), IT Solutions, Business process consulting, Outsourcing and recruiting, Training

Sample platforms: CrowdBuilt

Other Nuggets:

“We offer the capability to move to a fully custom solution in the future, if it suits the client.”

The Players – Real Estate Only

D) GroundBreaker (New York, NY)

Positioning: A Launchpad for real estate ventures. White label platform for real estate capital raisers to market their deals, raise money and manage investors.

Roots: Pivot in 2014 from initial marketplace offering.

“While running a real estate crowdfunding marketplace, we were not able to accommodate every deal that was pitched to us… Clients asked us if they could license our software to streamline their own fundraising operations without depending on their deals being approved by a third party and while protecting their intellectual property.  We realized that in the not so distant future, virtually all real estate capital raisers would adopt a similar technology.  So we made a full pivot.”

Key Features:

  • Complete White Label Platform
  • Real Estate only (equity or debt)
  • Compliance for Reg A, 506 (b) and (c), Reg S, Title III or Intrastate
  • Investor verification, escrow, online distributions, stock certs, audit trails
  • Custom web design and programming available
  • 30 day turnaround for web design

Geography: US, some other English speaking countries.

Applications: Real Estate Crowdfunding, Investor Management, Private placements.

Sample sites: Commercial Funding Exchange, VestMunity, CrowdTrustDeed

Other Nuggets:

Offer SaaS model where capital raisers can operate on a subdomain and launch a deal in under 30 minutes.

E) Investor Management Services (Charlotte, NC)

Positioning: Offer tools that help Commercial Real Estate (CRE) owners manage their assets and investors more effectively and add efficiency to back office functions.

Roots: Commercial Real Estate Company. Part of Quiet Stream Financial portfolio of companies.

“The IMS Platform was initially developed in 2014 to solve one main problem. There is a lack of transparency between sponsors and investors. In today’s world everything is managed and monitored online: bank accounts, stocks, 401k, etc. Why not commercial real estate investing?”

Key Features:

  • Focus on commercial real estate owners
  • Robust feature set for investment workflow, management, reporting
  • Investor dashboards, document access, CRM and activity tracker
  • Distribution waterfalls and processing
  • Sponsor dashboards, portfolio valuation, loan tracking

Geography: USA.

Applications:  Commercial real estate, Investor management, back-office.
Sample clients:  Phoenix Investment Funds, Aion Partners, Pensam Capital.

Other Nuggets:

Over 100 commercial real estate owner customers with $77B in combined assets under management.

The Profits

Money International Global CurrencyWhile each of the vendors have established pricing, you may be able to negotiate the rates.  As a general guideline, you can expect to pay an upfront licensing fee in the range of $5,000 to $15,000 USD and ongoing SaaS fees for hosting, upgrades and support of $500-$2500 USD/month.  Certain customization or feature integrations may cost extra.  Transaction costs may also apply for identity verification, payments or escrow.

As detailed in Part I: Pros and Cons, the first year investment in White Label of $15,000 – $40,000+ is less than the cost of one developer to build a custom software solution from scratch.  Partial implementations short of full portals may cost far less.

While every situation is different, your ROI may be realized relatively quickly from reduced operating costs, growth in your investor base, enhanced referrals and website traffic and increased investor satisfaction.

How do you select the right white label vendor?

search look UK binocularsThere are other vendor solutions available but the focus of this article was to present several investment and/or real estate vendor options with broad functionality and install bases.  As summarized above, each vendor solution has varying experience,  strengths, unique features and specific market, model or application expertise that can be utilized as a criterion in client selection.

Do your homework.  Do their feature set, workflow compliance and experience fit your market segment and business goals?  Visit their sites and ask for demonstrations.  What type of support do they offer?  Are you just licensing a tool or gaining added value?  Of course, consider value for money once pricing is factored in.

Your strategy should always be a key driver in making a smart vendor choice.  Do you simply want to move internal administrative processes online for efficiency?  Or do you envision a robust marketplace, a listings site or full broker/dealer portal offering investment advice?  Legal advice should be sought to guide your compliance.  A full platform business plan should also be developed to ensure that your investment leads to a viable operating platform.

Look for more insights and guidance in the upcoming final article in this series, Part III White Label Crowdfunding 101: Marketing & Ops, where we will share advice for the successful management and marketing of your new crowdfunding portal or platform.

If you lack in-house resources or project management and need strategic guidance to help navigate the options available to you, consider whether speaking to a neutral crowdfunding platform consultant may be worthwhile.

Bret ConkinBret Conkin is the Founder of CrowdfundSuite, an Equity and Real Estate Crowdfunding consultancy. CrowdfundSuite provides custom and white label portal and platform development and other expert services to help organizations profit from alternative finance strategy and technology.  Bret is an Ambassador to the National Crowdfunding Association of Canada and a former executive with FundRazr.  Learn more about CrowdfundLand, their Real Estate Services arm, here.  Bret writes regularly about crowdfunding on his blog. You may follow him on twitter at @bretconkin.

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