Crowdfunding with mezzanine capital – a comparison of German platforms from investors’ perspective

Abstract

Mezzanine-based crowdfunding, or crowdinvesting, is a return-oriented form of crowd financing where many investors participate with small amounts for example in companies. Platforms typically act as intermediaries between capital seekers and providers. Since the latter can choose between several platforms on the German market, a comparison of the active ones is necessary. Thus, this paper assesses similarities and differences between Companisto, Kapilendo and Seedmatch from the perspective of investors. First, it is compared how the platforms preselect the available investment options, followed by the investors’ opportunities for diversification and their access to information about the projects. Secondly, a comparison of aspects of contract design including financial instruments, control and information rights, maturity as well as profitability is carried out. Lastly, the risks are briefly compared especially focusing on the platforms themselves as one possible source. In conclusion, the offers on the German crowdinvesting platforms have things in common, but differences can also be observed. For example, while all three platforms offer profit-participating (subordinated) loans, the contractual arrangements differ among other things in terms of information rights and return opportunities.