Operation of startup platforms based on real experiences III. -

The next part of the startup series will take a closer look at all startup platforms. But don't worry, your journey in the world of startups doesn't end there. In fact, it's just beginning, as the sites where you can invest are incredibly diverse. Which country or countries' startup platforms do you want to use, and what companies do you want to invest in there? What laws apply to them, and how do you navigate them? What financial instruments are there, which ones should you avoid in order not to be at the mercy of others, and I could list the questions that arise. Since everyone basically wants to make money, the best way to increase profits is to avoid pitfalls and reduce risks.

In 2021, I created a complete startup portfolio, so in 2025, I updated the articles about startups based on my real-world experiences. You can find the rest of the startup series here:

💡Where you see the pushpin symbol, I am describing what happened based on my practical experience, because I find this much more realistic than the many theoretical concepts that can be found on the internet.

What are startup platforms?

Like all investments, startups also have platforms. Investors don't go to a broker and try to access the stock markets, but either find the company directly or pump money into the startup market through some venture capital fund. However, average people don't have enough capital for this. So they, along with other small investors, look for a site that provides startup investment services. In other words, startup platforms are sites that provide investment services to small investors, where they can invest their money in a common pool through the site.

Does the common pool sound familiar? Yes, in the case of investment funds, a very similar thing happens, many small amounts are treated as one and the investment is made. This is important to note because in this case, the startup platforms act as proxies for you. This way, companies do not have to conclude and negotiate contracts with 1200 small investors individually. The exception to this is when direct investment is made. They act as a kind of angel investor, which is why this form is called direct investment. You will use this less often, as it requires much more capital than proxy-based investments.

🚀What do startup platforms do?

Of course, the story does not end with startup platforms offering startups as a service, as the situation is much more complicated than that. In principle, neither startup platforms nor the states that provide tax breaks are interested in unsuspecting small investors investing in all sorts of new companies, as they would easily become victims of fraud. This looks pretty bad on the state level, and startup platforms don't have any interest in scaring off investors. For this reason, most startup platforms try to be careful about who they allow onto their websites.

According to some statistics, Seedrs and I think Startengine claim that 2% of startups pass this pre-screening. As I recall, 4000 companies apply to Startengine every year (Start engine), of these, based on the above percentages, approximately 80 meet the requirements set by them. Such companies often undergo careful and thorough review.

📌In practice: In fact, in my experience, these reviews are very superficial, they should not be trusted at all, they are useless. Neither platform should be trusted.

🎯Investigating startups

In order for startup platforms to approve a startup, they need to collect a lot of information about the companies and verify whether the data contained in their documents is true. These typically include the following:

💡content of financial documents
💡leaders' personalities and backgrounds
💡verifying the veracity of the data included in the company's presentation
💡checking other, not necessarily published data

Not only companies, but also individuals can be audited. The more serious positions that start with C, such as CEO, CFO, COO, etc., are typically filled by individuals who have been briefed by the companies beforehand, i.e. screened. This is good news for investors, as they essentially do most of the work for you. Don't be too happy, I usually double-check every company, because otherwise I can't be sure that the data is actually real, whether there are any errors or the like, and I recommend that you do the same. Not to mention that during the data collection, you will develop an image of the companies, which can later serve as a guideline for investing.

💪Startup platforms are also investing

In many cases, startup platforms also emphasize their reliability by investing in all listed companies themselves. For example, the American OurCrowd does this, but the opposite is also true, in many cases the startup platforms themselves have funding rounds, and you can also buy shares in the site itself. For example, in the case of Seedrs, there must have been several such rounds before Republic bought it. As I mentioned, the site acts as a proxy on behalf of investors, which is also an important task.

Although this is more a result of the structure of startup platforms, it is not unimportant how the sites represent company data to investors. In many cases, due to lame design or poor highlighting, important data can be overlooked, which you will often only notice when your money has already been invested in the startup. This is a bad thing because liquidity is practically non-existent in startups, as I wrote earlier: Startup investments must be written down to zero at the time of investment. That is why it is very important for startup platforms to provide services where it is possible to exit investments without special events, such as an IPO, acquisition, or merger.

📌In practice: I have never invested in startup platform shares in 4 years, because this is a typical case of double risk: from now on, you run not only the risk of investing in the startup, but also the risk that the platform will fail, a fraud will occur, and the like.

🌍📊The secondary market for startup platforms

Although I mentioned in passing that some startups have a secondary market, I haven't yet discussed how it works. The secondary market is quite similar to stock markets, but unfortunately the main thing is missing: there is no liquidity. The stock market works very simply by having sellers and buyers on both sides, and they sell and buy the offered stock instruments based on an order book. Let's look at an example: several sellers want to sell, say, AT&T shares. The order book will look something like this:

100000 AT&T shares for $28 (several shares sold at the same price)
73000 shares of AT&T for $28.1 (several sellers have the same price)
86000 AT&T shares for $27.9 (several shares sold at the same price)

And this goes on and on with thousands of lines, millions of shares and sellers, and it happens in seconds. So if you want to buy 100 AT&T shares at around $28, and of course thousands of other investors have a limit order, it will be executed very quickly, with a relatively small difference from the original price. Why? Because the liquidity is brutally high, millions of shares are changing hands, and this is just one company. The stock market was designed precisely for this purpose, to allow a very large amount of securities to change hands between two investors in a very short time. This infrastructure is a given on the stock exchange, we are used to it, but in the case of startup platforms it happens very differently.

🔥How does trading work on the secondary market of startup platforms?

Basically, I'm not particularly familiar with using secondary markets, I've only used the English pages, but I've already bought shares in startup companies there. Like all new financial things, you have to try this out with student money, and that's exactly what I did. I've been following a company called Stashbee tangentially on the Republic platform for a while now (Stashbee), but unfortunately I was not lucky enough to participate in their financing round. When the secondary market opened, which is not open like the stock market, but more on that later, I wanted to look at the company's previous pitch decks, but Republic only allows you to download them if you are an owner in the company. And that's where the idea came from, that I would buy the company's shares on the secondary market, and if I didn't like them, I would sell them for the same price.

source: Republic, the Republic secondary market order book

I am used to two things in normal stock trading: the liquidity is almost infinite for my portfolio size, and the fact that orders are filled immediately. That is why I don't even look at the order book, since even my limit orders are filled within a day if I don't set a target price that is too far away. This method would have been perfectly appropriate in traditional, highly liquid stock trading, except that Republic takes 8 days to confirm the purchase and transfer, and until that happened, I didn't have access to the company's introductory materials.

Moreover, here you can see all the items in the “order book” from the lowest price to the highest, which are actually packages that previous investors have bought but now want to sell. The problem is that there were all kinds of packages from 100 GBP to 6000 at all kinds of prices, with all kinds of share quantities. In other words, I couldn’t place the order at the price I had set, but instead bought a package of shares priced higher but for a smaller amount.

📌In practice: A few thoughts on the above: the liquidity of startup platforms on the secondary market is so low that some things cannot be sold for years. Typically not the things that people think are problematic anyway, i.e. the secondary market can freeze. The other thing is that you can't sell "shares" individually, but in packs. In other words, if someone puts up 10 pieces at a price of 10 GBP for +50%, you still have to pay 150 GBP. On the other hand, if someone puts up 500 pieces at a price of 10 GBP with -10%, you would have to pay 4500 GBP, but if you don't have that much money, even if this were the lower price per share, you still wouldn't be able to buy it.

💡What did I learn from the above case?

Let's learn the lessons, as this will fundamentally change the way you think about large stock exchange platforms. The secondary market of typical startup platforms is characterized by the following:

☝🏻It's not open like the stock market. In the case of Republic, they are closed for a week on the first Tuesday of every month, and then for 3-4 weeks
☝🏻There is almost no price movement, usually the price only increases or decreases with different investment rounds, or if the seller lets some of it go
☝🏻Orders are not executed immediately, in fact. They often happen outside the secondary market's opening hours, meaning you may have to wait a month for the next opening.
☝🏻Until the order is fulfilled, they will not have access to the companies' documents on Republic
☝🏻You can only buy and sell shares of companies that belong to startup platforms' own campaigns

So buying and selling shares is not nearly as easy as on the traditional stock market. On the one hand, this is very bad, but on the other hand, it gives a lot of opportunities to those who think a little. I won't shoot down every joke in advance, maybe I'll write about that someday.

🛒Is the secondary market the same on all startup platforms?

The short answer is no. On the one hand, each platform only lists companies that are part of its own campaigns. I found one exception to this, the American service provider Republic also lists Republic's European companies so that American investors can reach these companies, but apart from that, I don't know of any other such cooperation. Of course, this doesn't mean that there aren't any. In other words, any site that has or will have a secondary market will certainly contain different companies, unlike the stock market.

This is solved there by either listing the company's shares on multiple exchanges, for example, foreign companies' shares are listed on the American stock exchange under the name ADR, or the broker reaches multiple markets, which you can see on a common interface. However, these criteria are not in place for different startup platforms, so the market is very fragmented.

startup platforms, Crowdcube — Crowdcube's secondary market, Cubex
source: crowdcube

There are also companies that have created platforms specifically to allow trading in startup shares, such as Funderbeam (funderbeam). The point is, if you don't understand something, e.g. tokenized trading, startup funds, SAFE document, etc., or you're not sure how things work, then don't do it.

📌In practice: I cut the Cubex image above from the interface of the CrowdCube startup platform back in 2021. They promised back then that there would be a secondary market, but it hasn't been developed since, which is a shame in mid-2025.

🗳️How to choose from startup platforms?

I basically took two aspects into account when choosing startup platforms. One is ease of use, and the other is the country where the platform is registered. Let's start with the first one, because it's a much simpler topic.

What do the most published numbers show?

At first, I didn't attach much importance to the numbers that startup platforms publish about themselves, but when I tried the twentieth one, I realized that the bigger ones are usually better and more mature, so I started paying attention to these data as well. And where they don't publish these, you always have to wonder why they don't. Few clients and funded startups, little capital was allocated, and so on, this is always a warning sign about the given site. The following are worth checking:

amount of invested capital: I think it goes without saying that if a platform has been able to raise large amounts of capital for years, it speaks volumes about its stability. As far as I can remember, AngelList and OurCrowd are the leaders with $3000 and $1800 million respectively (Angel list, OurCrowd), but these sites only accept accredited investors. Of the publicly available sites, Crowdcube and Seedrs have both raised around £1000 billion (crowdcube, seedsrs).
number of supported startups: It's pretty much the same as invested capital, the more the better. There are many other metrics used here, such as how many IPOs were completed, how many unicorn startups were created - startups valued at over $1 billion - and the like.
How many famous startup campaigns have they managed? It's hard to judge how significant this is. I don't give it much weight, as startup investing is more of a guessing game than an investment based on actual fundamentals. Sometimes platforms get big, but most of the time they don't.
number of investors: It would be an interesting metric, but we don't know how much of that is active or what the average amount invested is. For example, Republic has 1 million investors, yet they have raised much less capital than OurCrowd, which has raised 90000 angel investors.

📊What services should you pay attention to?

The services are perhaps more important than the numbers above, so let's run through them too:

☝🏻secondary market: yes or no. Since I've talked about it a lot, you know the answer: it's good if it is.
☝🏻costs: the second most important criterion, the lower the better. Usually the following are charged: purchase, sale on the secondary market, profitable exit from the investment, e.g. IPO.
☝🏻minimum investment amount: some American sites play the trick of allowing non-accredited investors, but raise the minimum investment amount so high that small people can't actually invest. For more honest sites, this threshold is usually low, around 10 USD/GBP
☝🏻is there an automatic investment service: I don't use it, but some people require it.
☝🏻where is the platform registered: extremely important, will be discussed later
☝🏻Which countries' companies can be invested in: also important, usually the Americans only allow investment in American startups, while the English sites target the entire EU countries. There are also a couple of special ones, for example the Israeli OurCrowd, where you can only invest in companies from that country
☝🏻investment type: It was mentioned in a previous article, but I will explain this later. Typically, it takes the form of a debt instrument convertible into shares or equity, but American companies also have other types of contracts.

If you only skim through the above, you won't be "sold out", but at least it will hopefully be noticeable if something is wrong with a startup.

📌In practice: simplifying things, except for Republic, it is forgettable for European investors.

Startup platforms registered in different countries

This is perhaps the most difficult topic to explain, as it has a lot of legal implications. I am not a lawyer, so no one should expect me to use precise legal terminology, I will just describe things in my own words. Anyone who is more specifically interested in the legal situation of individual countries should do their own research, but I think this is not necessary for investing in startups.

Startup platforms in the UK and Europe

I basically put these under one umbrella, because their regulations are very similar, and they are the closest to us, Hungarians. In Europe, the United Kingdom ranks first in terms of money flowing into startups, followed by Germany. The two most famous platforms are: crowdcube, Republic

However, it is important to know that the due diligence procedure claimed by both sites is interpreted quite loosely by the sites. The same is true for pitch-fact check, and the reason for this is that these portals live off the commissions they collect from companies. In other words, the more startups they release, the more revenue they have, so they have a counter-interest in screening more seriously, as this would reduce the number of companies released and of course the commissions collected.

I would like to add that I currently only have investments in Republic and Crowdcube, but I always do my own due diligence on companies, and I recommend you do the same. The ratio of emerging startups, these are theoretically "verified" companies, is roughly 20-25:1, which is not the case after my analysis. I wrote about this in a previous article (Startup investments: everything you need to know about it), so I'm pretty strict, and you should be too.

📌In practice: there used to be a site called ECF Buzz that analyzed startups, they had a pretty good database, but the site has been discontinued, so it is no longer available today, even though they looked much more into the companies than the platforms, which is a shame. I have completely given up on the Crowdcube platform since 2022, and only invested in Republic afterwards, because their service is much better.

Syndicate Room

To overcome the above problem, the Syndicate Room website was created, among others, which operated in exactly the same way as Republic and Crowdcube until 2017. However, in the last 4 years, they have completely changed their operating principle, which resulted in the following:

✨The minimum investment amount is £5000, which is what you need to top up your account with
✨Basically, you can invest in funds, and they are looking for more serious investors, effectively creating a "community venture capital company"
✨significantly more expensive than the platforms mentioned earlier. They are still cheap compared to the industry average of 2-20% – 2% cost and 20% profit – the fund management fee, there is a set-up fee – 2% -, and on top of that there is an additional 1.5% annual management fee, so the total cost for the 7-year term is 12.5%
✨due diligence is performed at a very high level, as they are not dependent on a large number of companies and a mass of people with little money, but in return they play with high stakes and diversify very roughly
✨most investors can take advantage of EIS, a significant tax break, if they are English tax residents.

From the above, it can be seen that the site has practically driven out retail investors due to the change in their rules. Apart from UK citizens, other tax residents are not eligible for EIS tax relief, so the site has lost its raison d'être. This, in my opinion, has little to do with the original principles of crowdfunding, so I have no position in companies here.

🥈Other services

Of course, the number of startup platforms is much higher than this and there are countless other sites, which you can see in the table below. The reasons why I rejected these platforms are as follows:

❗low total investment amount
❗little or no targets
❗charitable, after all, everyone wants to make money on their investments, right?
❗language problems, e.g. Dutch, Swedish, etc.
❗In many cases, average and angel investors are separated, with the latter receiving much more opportunities for higher investment amounts

If you want direct access to these, click on the links below: Invesdor (Scandinavian and German), Company (German), Lendahand (Dutch). However, until the number of startups on these sites increases drastically and the conditions improve, I will avoid these sites for now.

📌In practice: There were a few other platforms, but several have collapsed in recent years, such as FundedByMe, which was a Swedish/international startup platform. So it's not that their opportunities are improving, but quite the opposite: the small fish are being eaten by the big ones.

🇺🇸Startup platforms in the USA: there is a small problem

Anyone who thought that reviewing the startup platforms available so far was a complicated task will be disappointed, because the situation in the USA is much worse. To understand this, you will need some legal knowledge, but since I am not a trained lawyer, no one should rely on what is described here in legal matters, so I will simplify everything significantly. In the citadel of capitalism, it was specifically forbidden for “little people” to invest in startups, this restriction was declared by the Securities Act created in 1933.

source: Transylvanian letters, Uncle Sam

The law stated that anyone who is not an accredited investor, meaning very wealthy, cannot invest in startups. But what does the term accredited investor mean in America? It doesn't even mean that someone is very educated or has some kind of degree. Instead, a wealth threshold was introduced as follows:

$200000 annual income for the past 2 years, or $300000 if combined with a spouse
has a net worth of at least USD 1 million, excluding real estate at the reported address

This was true for roughly 10.6% of Americans, meaning 90% of them were excluded from this type of investment, which is simply ridiculous in a capitalist society.

What happened in 2012?

Barack Obama changed all of this with the JOBS Act, a piece of legislation that lifted the above prohibitions after roughly 80 years. From then on, anyone could invest in private companies. The legislation was called Regulation Crowdfunding It is also called the European Startup Act, which came into effect in May 2016, which is interesting because at that time the big European startup platforms had already existed for a long time, meaning they finally managed to get ahead of the USA in something, at least in the financial field. However, the matter is a little more complicated than that, as certain sections of the JOBS Act (Title III and IV) require different things for certain companies. This would not be particularly interesting in principle, but since you will often come across such things on the sites, it is good to know about it:

JOBS Act Title III, Regulation Crowdfunding, abbreviated as Reg CF: Companies can raise a maximum of $5 million in a 12-month period
JOBS Act Title IV, Regulation A+, abbreviated as Reg A: Companies can raise up to $75 million in a 12-month period, also known as a mini IPO, but it is less expensive. Within this, there are two more levels (Tier 1 and 2), which set the maximum amounts at $20/75 million.

You can read more about this in two articles from the Startengine startup platform: Crowdfunding Regulations 101, Regulations: What Entrepreneurs need to know

💰How much can you invest in startups listed by startup platforms?

It is important that American startup platforms are primarily accountable to and must comply with American laws. What does this mean? Within the framework of the JOBS Act, there is also a limit on how much an American citizen can invest in a year, at least if they are not an accredited investor. People can basically be divided into two categories:

If their income is less than 107000 USD per year, then:

They can invest USD 2200 over a 12-month period, or
5% of their annual income or total assets

If their income is $107000 or more per year, then:

10% of their annual income or total assets

Since March 2020, this has been supplemented by the fact that the higher of the two thresholds must be taken into account, while previously the opposite was the rule of thumb. Let's play with the numbers a bit, there is also a calculator (Investment Limit Calculator). There are as many different average salaries as there are countries, but I think I can say this with certainty: there is no country in Europe where the average salary reaches 107000 USD, and even in the USA it is lower:

Switzerland ~$88633 🇨🇭
Luxembourg ~$85631 🇱🇺
United States ~$62088 🇺🇸
Iceland ~$57573 🇮🇸
Netherlands ~$47892 🇳🇱
Norway ~$47232 🇳🇴

Barack Obama — source: CNN, we can thank him for the JOBS Act

When registering, the sites ask if you are an accredited or non-accredited investor, and if your annual income reaches 107000 USD. To be honest, I didn't try to lie anywhere, so I don't know what would happen if I got a higher annual salary. However, the above low amount clearly hinders diversification, for example, and actually achieving a meaningful return. Of course, this can be avoided by having a lot of money in the bank accounts, but it's not very realistic.

📈Confusion around investable instruments

Since the genie was released from the bottle with the JOBS Act, large startup incubators like Y Combinator have started creating all kinds of financial instruments. So far, we have only talked about equity and convertible notes, since European sites use these. Let's quickly run through what these were, but if you are interested in more, you can find out more in a previous article (Startup investments: everything you need to know about it):

📈Stock: You can buy a stake in the company at a given share price. It can be direct, which is what angel investors do, when a contract is made between the company and the buyer, or it can be through an agent, when an acting party concludes the contract on behalf of many small investors and holds the papers.
📈Debt convertible into shares: There is no share price, the debt/bond can be converted into securities at a later date in a specified manner and at a discount. It is like a loan, but the borrower does not intend to repay it, but instead pays with shares in the company.
📈Share convertible into shares: I've never seen these on English sites, but I have seen them on American ones. They're typically invented by larger startup incubator companies, SAFE, which stands for Simple Agreement for Future Equity, which comes from Y Combinator, and KISS, which stands for Keep it Simple Security, which was developed by 500 Startups (500 Startups).

SAFE is a simplified document that is good for startups, but it is disadvantageous for investors, as it does not declare a lot of rights. It is so dangerous that the SEC, the US securities regulator, banned its use in Reg CF-type crowdfunding rounds in March 2020. For those interested in more on the topic, Startengine blogYou can read about the topic here (SAFE notes are not safe).

🇺🇸Recommended startup platforms in the USA🇺🇸

The American financial market is incredibly large. Because of this, I found a lot of platforms, so many that just registering and browsing would take weeks, and I hadn't made any investments on them yet. Considering that even the oldest platforms are only a few years old, since the laws did not allow investing in startups, anyone who started the topic at the very beginning can now say that they have tried most of them. I am not one of these people by chance. So, I can only report on my experiences in general, which are certainly incomplete at the very least. Read the following lines in light of this.

Characteristics of American startup platforms

Before I dive into the specific pages, I would like to list a few general characteristics that are typical of American startup platforms, in general:

💡Unlike English sites, many do not link to the American financial database EDGAR, you have to look that up yourself
💡They typically think in quarters, companies can be tracked more quickly
💡American reports are much better, e.g. they include the cashflow section, there is no micro account like the English ones
💡not all sites allow the same industries, e.g. Microventures allows marijuana-related companies to appear (Microventures), Startengine is not
💡Usually, the main page of the investment shows whether it is a Reg CF or Reg A+ investment
💡The minimum investment amount is usually higher (500-1000 USD) than in Europe
💡The same financial instruments are not available everywhere. e.g. equity, convertible note, SAFE, etc.

One more important thing you need to know is that there are platforms for P2P lending, i.e. between private individuals and private individuals, but their use is currently illegal in several European countries, such as Hungary. Only accredited credit institutions can provide this, not private individuals. However, it is NOT forbidden to own shares in companies that deal with P2P lending. I also have investments in companies called Loanpad, CrowdProperty or Brickowner, for example, the first two have been thriving since 2021, the latter is practically bankrupt.

🛠️Start engine

One of the most manageable surfaces and excellent for blogand their FAQ, although this can be said for most American sites. Features:

💡It is under the supervision of the US SEC, like all other sites, it is worth checking, if it is not on the site, you can close it now
💡There is a secondary market, Startengine Secondary. There is no transaction fee, the seller has to pay a 5% commission, but you can only access it with an American address, bank account and phone number, but for example I couldn't even enter a European phone number
💡The pitch deck is not downloadable like on the English sites, which is unfortunately a common problem
💡Investment amount is only accepted via wire transfer (unless you have a US bank account)
💡UK and Canadian investors are not accepted
💡It is basically free to use, but companies can pass on the 3,5% commission imposed on them
💡They have a special reward system, the so-called owners bonus. This is a kind of subscription, the essence of which is that you get 10% more shares after your investments, a 20% discount on the secondary market, i.e. from the fee, so the fee will be 4% instead of 5%, and you have priority in case of overfinancing
💡high investment and reward thresholds
💡there is due diligence, SAFE type investments are prohibited for investor protection

Overall, the site would be good, but I can't use the secondary market like this. In addition, due to the high investment thresholds, it is not possible to take mini positions with small amounts and thus make investments suitable for tracking.

🏛️Republic

The site is best known for its partnership with Seedrs, which has made European startups accessible to the American community. Since Republic acquired Seedrs in 2022 and continues to operate under the name Republic Europe, the merger is now complete. You can often find companies here that you can also find on Republic Europe. Therefore, if you like a company, it is worth checking out Europe to see if it is listed there as well. Features:

💡there is due diligence, 5% of startups pass this method, although you already know how much it costs
💡There is a minimum and maximum investment amount, usually the minimum is 100 USD, which makes it difficult to make tracking investments
💡The pitch deck cannot be downloaded here, like on the English sites (this is unfortunately common)
💡There is no secondary market, but they are working on it (there is also a legal obstacle to this, in the USA, startup shares must be held for 12 months)
💡there is a SAFE investment opportunity

As long as there is no secondary market, the site is not interesting to me. The Europe section also lists many startups, so it is easier to buy there as a European.

🐣Microventures

💡They don't link to the SEC website and the Edgar database, but you can find it in the forms under the documents tab
💡almost only early stage companies are listed, this is where the risk is greatest
💡there are few companies for non-accredited investors, there were 12 when I looked
💡there are only micro-enterprises, almost all options REG CF
💡built-in insurance-selling ear, a bit of marketing smell
💡They have a pretty good education section and an insight service where you can look deeper into the lives of companies
💡brought big names to market: Slack, Airbnb, Uber, Lyft
💡allows SAFE type investments
💡variable costs, also under the document tab (about 5% on average) and this is deducted from the investment amount, therefore expensive

🌱Seedinvest

💡there is also a separate section for accredited and non-accredited investors
💡relatively many startups, and there is also an upcoming section
💡there is a mix of Reg A and Reg CF, and they are all supervised (you bought it)
💡there is a so-called side by side offering, when you can invest in several types of securities at the same time
💡in many cases there is a minimum investment amount, usually 1000 USD
💡They run not only micro companies, but also larger ones (Reg A+)
💡Write down the number of funding rounds you are in.

Interesting site, with a lot of startups, you can look around, but here too you have to invest at least 1000 USD.

🧑‍💼Wefunder

💡open to all investors
💡brutally many investment opportunities, lots of startups
💡downloadable pitch decks, called presentations (the same two)
💡every company has a Lead Investor who fights for the rights of investors (this solution is also used by other sites)
💡The companies section is pretty crappy, e.g. it's hard to find the investment form, the SEC number isn't there, and I could list more
💡In many cases, the investment thresholds are low, I have seen 100 USD in several places
💡If I had to describe the pitch decks, I would use the term ridiculous. I saw a 2021 pitch that referenced 2019 data and how high the growth was in 2017.
💡I don't know if there is due diligence, but it doesn't seem like there is, the content is quite diluted

Wefunder is included in this article for one reason: its downloadable pitch decks. Since you can learn a lot from them, it's worth checking out the table for that reason alone, but I think there are a lot of terrible startups on the site.

📌In practice: In 4 years, I ended up not investing in any American site. As a European investor, it's a much bigger adventure, it costs more, the options are more limited, so there's pretty much no point in using these startup platforms. The main problem is that the story is legally confusing in some places, so stick with Republic Europe, it's one of the largest EU startup platforms anyway.

Hungarian startup platforms

This will be a short chapter, as there is only one of these, the Capital Portal (Capital portal). Since startup platforms are still in their infancy in Hungary, I can't report more than the above at the moment. My problem with it is that the investments are based on forints, which according to the dream book is not a very good sign. There are very few investment opportunities on the site, the campaigns are slow to roll out. We hope that circumstances will change one day, and then it will be worth returning to the site.

hide-in-translation — source: HelloCristo, the car rental app interface

📌In practice: Out of a sense of adventure, I invested in a startup called Cristo on Tőkeportál in 2023 to see how it works, and that Hungarians still have something to learn. By the way, Cristo's car super app service is great, I use it on a daily basis, but not everything is rosy here, as you could see in season 8 of the show Cápák Között. Despite this, I do not plan to make other investments, since the investments are based on HUF.

Startup platforms summarye

This has become the longest article of my life, with more than 35000 characters, but the topic is quite complex. If I wanted to summarize the essence briefly, I would say that for a European investor with small investment amounts, Republic is the best alternative (Republic). Fortunately, there are countless opportunities for those who would not be suitable for this. However, typically higher investment amounts and not very supportive legal or other conditions will prevent this. Nevertheless, I wish everyone good luck, whichever of the startup platforms you choose. You can find previous articles related to startups here: Startup investments

Frequently Asked Questions (FAQ)

What is a startup?

A startup is a start-up business that is based on an innovative idea and aims for rapid growth, usually in a technology or digital field. Characteristics of a startup:

Innovation: Startups often come up with some kind of innovation, whether it's a product, service, or business model that didn't exist before or is significantly better than existing ones.
Scalability: The goal is not to create a small stable enterprise, but to build a business that can grow quickly, even internationally.
Risk and capital requirements: Startups often require external investment capital, such as from angel investors or venture capital funds, as they may not necessarily generate profits in the initial stages.
Experimental phase: Startups often test, experiment, and pivot (change direction) to find real market demand and a sustainable business model.

Using a simple example: A new burger joint isn't a startup because it copies a known model. But an app that uses artificial intelligence to recommend personalized diets and deliver ingredients to your home could be a startup.

Who is an angel investor?

An angel investor is a wealthy individual who invests their own money in startups – usually in the early, risky stages – in exchange for a stake in the company.

Main characteristics:

It helps in the early stages: when the startup has no or minimal revenue yet and a traditional bank loan is not an option.
Uses own capital: You do not invest as a fund manager or company, but as an individual.
You will receive a share of: In exchange for your money, you acquire an ownership stake, e.g. 5–30%, in the business. It is not worth acquiring a very small stake, because then it will have no impact on the operation of the company and even in the event of a large profit, you will only realize a relatively small amount of money.
More than money: It often provides experience, connections, and advice; this is called smart money.
The purpose of profit: the long-term profit that the startup can realize after a successful exit, e.g. sale, going public, etc.

Using a simple example: If someone comes up with a new healthcare app but doesn't have the money to launch it, an angel investor might give them, say, €30 to build the first version - in return, they'll get a 000% ownership stake.

Who is a startup investor?

A startup investor is a person or organization that invests money (and often knowledge and connections) in a startup business with the aim of generating future profits through the growth of the company. A startup investor can invest in several ways:

1. Angel investor

The meaning of an angel investor is: an individual who invests his own money in early-stage startups (I wrote about this in detail above).

2. Venture capital (VC)

A professional investment organization that manages money from external sources, such as pension funds, banks, and government funds, and invests it in startups, typically in the growth or scaling stage. It works with larger amounts than angel investors.

3. Accelerators and incubators

They are not classic investors, but they often provide a small amount, mentoring, office space, and connections to a fledgling startup in exchange for a small stake.

4. Crowdfunding investors

They are ordinary people who support startups with small amounts of money through online platforms such as the previously mentioned Crowdcube, Republic, or StartEngine, in exchange for equity or other rewards.

Startup series: what to watch if you want to get smarter?

You can watch countless series about startups online or on various TV channels. These are typically transferred from one country to another on a franchise basis, and they may be renamed, but the basic logic is the same.

🦈 Shark Tank (USA)

The most famous startup reality show.
It has been running since 2009 and has produced hundreds of episodes.
It includes investors such as Mark Cuban, Kevin O'Leary and Barbara Corcoran.
Several successful startups have started here (e.g. Bombas, Scrub Daddy).

🦈 Dragons' Den (UK, Canada, Japan, etc.)

The original format that Shark Tank was made from.
It has been going on in the UK since 2005.
It started in Japan even earlier under the name "Manē no Tora".
In Hungary, for example, it was broadcast under the title Among Sharks.

🎬 StartUp (Netflix, 2016–2018)

It's a fictional series, not a reality show.
It tells the story of a tech startup (based on digital currency), embedded in crime and drama.
Starring Martin Freeman and Adam Brody.

📈 Planet of the Apps (Apple TV, 2017)

A reality show where mobile app developers compete for investment.
Will.i.am, Gwyneth Paltrow, and Gary Vaynerchuk were also featured as mentors/investors.
It was cancelled after one season.

🧠 The Pitch (podcast, USA)

An audio-based “Shark Tank” where startups pitch live to investors.
More honest, less showmanship, more real business decisions.

Is startup a tricky investment?

It's a bit difficult to define the above concept, but "tricky investment" is an unofficial term in the startup world, but it usually refers to investments that appear favorable on the surface, but behind the scenes, they hide conditions that could be detrimental to the startup (or other owners) in the long run.

🔍 Typical “tricky” elements in startup investments:

🎣 Too low rating

The angel or VC gets in at an unrealistically low value, thus acquiring too large a stake, which demotivates the founders or makes subsequent rounds impossible.

📜 Preferred shares (liquidation preference)

This is a standard condition, but if it is extreme (e.g. 2–3x refund right), it can practically "zero out" the founders during an exit and you won't necessarily know about it. It's worth asking the founders if they have one.

⛔ Protections against share dilution

The investor is protected against future devaluation when additional shares are issued, but if this is too aggressive, everyone else loses significantly on their stake. This has happened to me several times, fortunately crowdfunding platforms almost always give you the opportunity to contribute additional capital so that your stake does not change.

🧨 Buyback right

The investor stipulates that in certain cases he can return his share at a fixed price, for example, if the exit does not occur within X months. I have not encountered anything like this yet, but it is theoretically possible.

💼 Forced exit rights (drag-along, tag-along)

These can be useful, but if they grant excessive rights to only one side, the interests of the other side will be harmed.

🤔 Why would a startup undertake this?

Money is needed, and there is no better offer. It was quite typical in 2024 that there was 1 offer, on a “must have, don’t have” basis, because of this, there were cases where the valuation fell by a third, while the revenue increased by four times! This is a typical value disparity, the question is, was the higher valuation the exaggerated one or the new one very low? This is why you have to understand startups too.
Due to inexperience, they fail to see the long-term consequences.
The investor “seems friendly,” but the contract is not.

What is liquidity in startup investments?

Liquidity for startups refers to how quickly and easily a company can convert its assets into cash when needed. This is especially important because early-stage companies often don't have a stable revenue stream, so they need to have cash readily available to ensure cash flow.

Liquidity therefore helps startups respond to market changes, finance daily operations, or make new investments. 💰🚀 Maintaining an adequate level of liquidity is essential for a business to operate smoothly, even if larger investment rounds are still pending.

In another sense, liquidity refers to the turnover of the underlying secondary market. Unlike listed companies, startups are not listed on the stock exchange, so they are completely illiquid by default, there are two solutions to prevent this:

secondary market of platforms, such as Republic's own
When publicly traded companies invest in startups, the shares of the holding company are traded on the stock exchange. Startups are also acquired in the SPAC format. A SPAC is an empty publicly traded company that has no substance but has acquisition money, so the acquired startups are automatically listed on the stock exchange.

What does minimum viable product mean in startup investments?

In the world of startup investing, a minimum viable product (MVP) means that a company creates a product in the simplest possible form that can solve an important problem for the target group. The goal of an MVP is to quickly create a basic version for the market, with the least possible resources, in order to test its reception and further develop it based on that. An MVP helps avoid the excessive costs that could arise if the product were launched in a fully refined form while the market response is not yet known. 🚀💡 This way, startups can quickly validate their idea and modify the product if necessary before making larger investments.

What does NDA mean in startup investments?

An NDA, or Non-Disclosure Agreement, is a legal document that two parties sign to protect their trade secrets and confidential information. In the case of startup investments, an NDA often comes into play when discussing new ideas, products, or services, and it is important to keep the information private. An NDA ensures that the other party does not share, use, or disclose the information shared. 🤐🔒 This helps startups protect their intellectual property while giving others the opportunity to take an interest in their projects without having to worry about information leaking out.

What does pro-rata law mean? And what does pro-urbe mean?

Pro-rata rights in startups mean that an investor can retain the same proportion of their share in future capital raisings as they acquired when they made their initial investment. For example, if an investor has a 10% stake in the company and the startup raises new capital, the pro-rata right allows them to secure that 10% with a new investment so that their ownership stake is not reduced. 📈💡 This is a protective mechanism that allows investors to maintain their influence in the company.

The term pro-urbe is a legal term of Latin origin that means “for the sake of the city.” In a legal context, it usually refers to the fact that a decision or action should be made with the interests of the city or community in mind. Pro-urbe rights generally refer to benefits or rights that benefit a city, town, or community, such as the use of property for public purposes or the provision of public services. 🌆It usually has nothing to do with startup investments.

What is a startup pitch and what is a pitch deck for startup investments?

A startup pitch is a short, to-the-point presentation that aims to pique the interest of potential investors, partners, or customers in your startup idea. During the pitch, the entrepreneur presents the company's vision, the product or service, its market position, the problem it solves, and why it is worth investing in this business. This is usually a personal, oral presentation that lasts about 15-30 minutes. 🎤🚀It is almost always given in person or, more recently, via video call, as investors from many countries around the world are interested. In my experience, the latter are typically longer, and the ones I have attended have been 90 minutes or more.

A pitch deck, on the other hand, is a visual document in PowerPoint, PDF or other presentation format that presents the startup in detail. A pitch deck is usually limited to 10-15 slides and contains the most important information about the company's business model, market, product, financial plans, competitors and team. A pitch deck is therefore a supporting material for the pitch presentation, which helps potential investors understand the startup and its growth opportunities. 📊📈On online platforms, both forms usually exist in parallel, as investors are aware of the pitch deck and ask questions of the owners during the online pitch.

Legal and liability statement (aka. disclaimer): my articles contain personal opinions, I write them solely for my own entertainment and that of my readers, so the articles published here do NOT exhaust the scope of investment advice in any way. I have never wanted, do not want and am unlikely to give such advice in the future, what is written here is for informational purposes only and should NOT be construed as an offer. The expression of opinion is NOT a guarantee in any way to sell or buy financial instruments, you are SOLELY responsible for the decisions you makeancestors, no one else, including me, will take on this risk.

Operation of startup platforms based on real experiences III.