Startups Raising: Platform-by-Platform Performance Breakdown

CHART OF THE WEEK 📈

By Léa Bouhelier-Gautreau | Read

When investing in startups online, the amount raised plays a critical role in growth - and ultimately the success of an investment, with larger raises often leading to stronger performance. While a lower burn rate can justify smaller raises, companies ultimately need capital to spend, take risks, and grow.

To explore how funding amounts vary, we analyzed the top five platforms with the most raises, focusing on companies that started and closed their raises between July 2023 and December 2024. We visualized the amounts raised using a box chart, showing the minimum, first quartile, median, third quartile, and maximum raised on each platform. While maximums may vary slightly with different timeframes, the other metrics provide a clear picture of recent platform performance.

• Failure rates: Every platform had deals that raised $0 due to failure or withdrawal, but at least 25% of raises on NetCapital resulted in no funds raised.

• Lower quartiles: On Wefunder, StartEngine, and Republic, 75% of companies raised around $60,000 or more, with slight variations. On Dealmaker, however, 75% raised at least $100,000.

• Median performance: The median raise on Republic is slightly higher than on Wefunder, but 50% of companies on StartEngine raised at least twice the median amount seen on these competitors, thus $200k or more.

• Upper quartiles: On Wefunder, 25% of companies raised $280,000 or more. This figure increases to $540,000 on StartEngine and over $1.3 million on Dealmaker.

• Maximum raises: In this sample, the highest raise was $1.3 million on NetCapital, $4.2 million on Republic, $4.4 million on Wefunder, and $5 million on StartEngine, with all three last nearing the Reg CF $5 million cap. Dealmaker, which features more Reg A+ deals, saw issuers raise up to $20 million.

These discrepancies between platforms stem from several factors. The investor pool and their available capital directly impact raise amounts. Platform strategies also play a role; Wefunder, for instance, hosts 44% more companies than StartEngine in the selected time, which could potentially lower its median raise by spreading investor attention across more deals. Additionally, startups on StarEngine tend to be more mature than on Wefunder, thus explaining that they need - and end up raising, more funding. Marketing support also varies, with some platforms offering in-house services to boost results.

Dealmaker stands out as an outlier. Unlike marketplace-style platforms, it operates as a white-label solution, allowing companies to raise independently, often leading to larger raises, particularly through Reg A+ offerings.

INVESTMENT ROUNDTABLE

By Sam Fiske / Watch

In this week’s Investment Roundtable, we tackle two pressing topics for startup investors

TrueCrowd Closes Its Doors – After years in the equity crowdfunding space, TrueCrowd has officially shut down. What does this mean for investors who participated in deals on the platform? We break down what you need to know if a platform you invest through ceases operations.

Public vs. Private Revenue Multiples – Why do private companies in crowdfunding often have higher revenue multiples than their public counterparts? Our team dives deep into the drivers behind these numbers and what they signal for early-stage investors.

Don’t miss this week’s actionable tips for navigating platform risks and analyzing startup valuations

PITCH REVIEW 💸

By Teddy Lyons \ Deal Report

Brief: NightWare specializes in developing digital therapeutic solutions for individuals experiencing nightmares associated with Post-Traumatic Stress Disorder (PTSD). The company delivers its therapy through a smartwatch, providing a non-drug, FDA-cleared method to alleviate PTSD-related nightmares without waking the user. For those with PTSD, nightmares can be a chronic issue, affecting their ability to function. NightWare provides a practical tool for managing a complex and often distressing condition by offering a solution that integrates seamlessly into daily life through a smartwatch. The company has raised over $3M in offline rounds previously, and has achieved strong product-market fit with $4.7M in 2023 revenue (up 132% from 2022) at 83% gross margins. The company is raising at a pre-money valuation of $22,284,541, representing a 2023 valuation-to-revenue multiple of ~4.8X.

Key People: Matthew Tucker (CEO) is a seasoned MedTech executive with over two decades of experience in the industry. His career spans roles at major companies like Baxter Healthcare and Mylan Pharmaceuticals, where he drove significant revenue growth and led strategic initiatives. Tucker's expertise includes product management, sales, acquisitions, and healthcare systems. At NightWare he initially served as Chief Commercial Officer before being appointed CEO in July 2024. Under his leadership, NightWare achieved its first $1 million in revenue without a dedicated sales staff. Tucker's diverse background across Med Device, Pharma, Digital Therapeutics, and Payer/Healthcare Systems has been instrumental in his ability to drive growth and transform organizations throughout his career.

Co-founder and Chief Product Officer Grady Hannah's career spans over two decades, starting with 15 years in Silicon Valley's tech industry, focusing on real-time simulation and video game development. He later led Business Development at Pushpin, a GIS company, contributing to its successful acquisition. In 2017, Hannah joined NightWare as CEO, where he played a pivotal role in guiding the company through clinical trials, securing FDA approval, and obtaining "breakthrough therapy designation" for their digital therapeutic for nightmare disorder. Under his leadership, NightWare focused on commercialization for DoD, VA, and Medicare populations, while also securing significant investment. On July 25, 2024, Hannah transitioned to the role of Chief Product Officer at NightWare, shifting his focus to advancing the company's platform and enhancing its competitive position. Throughout his career, Hannah has demonstrated a commitment to leveraging technology to address medical challenges, particularly for veterans and individuals suffering from PTSD and nightmare disorder.

Here's what we like: NightWare's competitive advantage lies in its unique FDA-cleared solution, which specifically targets PTSD-related nightmares. This positions the company favorably against broader digital health competitors, offering a validated therapeutic approach that resonates with its primary customer base. The interest from the Military Health System and Veterans Health Administration further underscores its potential for strong market adoption. Additionally, the company's revenue growth of 132.5% year-over-year is a testament to its product's market acceptance and effectiveness. The company has strong gross margins of 83%, indicating strong manufacturing build out and ability to produce and sell the product at a competitive price. And finally, the company is fairly valued at a valuation-to-revenue multiple of just 4.8X.

Here's what we don't: Several factors contribute to a bearish outlook for NightWare. One primary concern is the company's reliance on a niche market, which could limit its growth potential. While the focus on PTSD-related nightmares addresses a specific need, the narrow target audience may restrict market expansion opportunities. Additionally, the company's market penetration is dependent on healthcare system adoption, which can be slow and faces regulatory challenges.

The competitive landscape presents another challenge. While NightWare has a unique FDA-cleared solution, it faces indirect competition from broader digital health and sleep therapy companies. These competitors, with larger resources and more extensive market reach, could pose a threat to NightWare's market share and pricing power.

LAST POLL RESULTS

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