Editor’s Note: This article was updated on Sept. 10, 2020, to highlight three more interesting startups on Wefunder.
Wefunder is one of the leading equity crowdfunding platforms on the internet, and it has listings of a broad array of startup companies to invest in. Note that the minimum investment is often as low as $100.
This type of investing is fairly new. In 2016, the Regulation Crowdfunding law came into effect and essentially allowed anyone to invest in startups. Before this, you had to either be an institutional investor or very wealthy.
Despite this, the risks of this type of investing are significant. For the most part, many early stage companies fail. And even when there is success, it can still take a long time to get liquidity from an investment. This is why it’s vital for investors to do their own analysis and research and to make sure of their risk tolerance.
Additionally, investors should also consider diversification of their portfolios. But then again, if just one company takes off, it can certainly mean hefty returns.
OK then, so with WeFunder, what are some of the interesting companies to invest in? Well, let’s take a look at three:
- Rad Intelligence
Companies to Invest in: HealtheMed
Minimum Investment: $100
HealtheMed is a telemedicine platform that is focused on the four million people in the U.S. who are confined to their homes because of chronic disease. The company estimates that the savings for state Medicaid programs is about $1,700 per visit to a hospital emergency room.
Yet HealtheMed is more than just an app. The company’s system comes with a smart camera, medication dispenser, a thermometer and other monitoring devices to help doctors. There are also notifications to deal with missed medications.
HealtheMed is free to people with special needs, as well as doctors, nurses and pharmacists. Instead, the company generates revenues through contracts with Medicaid programs. Keep in mind that it has a contract with Minnesota’s state-run program for 77,000 potential customers and the reimbursement is for up to $3,600 per patient per year.
But despite this, HealtheMed is still developing its system and it is not clear when it will be rolled out.
For the crowdfunding campaign, the company has raised over $35,000 from 44 investors and the valuation is $3 million. The goal is the raise anywhere from $50,000 to $600,000.
Minimum Investment: $100
Among all the interesting startup companies to invest in, a popular sector is social media. Let’s face it, it is a dynamic market — and large.
So as for Rad Intelligence, the company believes it has an interesting spin on an important part of social media: influencer marketing. The company’s platform helps small businesses automate campaigns, such as on Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) and Instagram. This category has seen tremendous growth, going from $4.5 billion in 2017 to $10 billion now. Yet the marketing expenses can be onerous for smaller organizations. In fact, the founding team for Rad Intelligence has first-hand experience of this with other ventures.
With Rad Intelligence, you put together digital content and set the price/budget. The company will then leverage its own network — and any fees are based on performance. There is also a system that provides transparent tracking of the results.
The company’s investor deck shows that there was 400% revenue growth for the first half of this year and the user count was up 10X (although, these numbers are off a small bases). There are currently 16 clients like Ranker, Spin.com and Nikola (NASDAQ:NKLA).
As for the crowdfunding campaign, it has been quite successful. The amount raised is over $754,000 from 691 investors and the valuation is $5 million.
Minimum Investment: $100
Manna is an Apple (NASDAQ:AAPL) iOS app for home cooking. The co-founder and CTO (Chief Technology Officer), Guy Greenstein, got the idea for this when he watched his mom cook with modified recipes that had sticky notes pasted to some notebooks. He knew there had to be an easier way to make those recipe adjustments.
With the Manna app, you copy recipe URLs and have them scanned. The app will then create a formatted version. And yes, you can create, edit and modify them. There is even a Tinder-like feature that allows you to swipe right if you like a recipe or left if it is not right for you. Then you can share your recipes in a social feed, along with photos.
Some of the features that Manna plans to launch in the coming months include:
- The ability to print cookbooks to provide as gifts.
- Badges for accomplishments
- The creation of a B2B (Business-to-Business) portal for restaurants and chefs to handle food supplies
- Suggestions for recipes based on your usage
One of the catalysts for growth for Manna has been the novel corona virus. With millions of people eating meals at home, there is a big demand for apps to help out.
And regarding the crowdfunding campaign, Manna has raised over $110,000 from 87 investors and the valuation has been set at $8 million.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks