CrowdedHero Review 2024: an Innovative Equity Crowdfunding Platform

I love to diversify my investments on as many great platforms as possible. In this article, I will review the equity crowdfunding platform CrowdedHero, which I first heard about in 2022.

I must admit I usually don't invest much on such platforms as the expected returns are usually not clear (as the companies you invest in are startups), and the companies usually don't pay any dividendes over time. 

CrowdedHero promises to solve those two issues by offering to invest in companies with an already existing track record, and with a clear plan for growth & to give back dividends to investors - so I was definitely really interested to learn more about it. Let's dive into the review!

What is CrowdedHero?

As for all equity crowdfunding platforms, CrowdedHero is a financial platform that allows investors to invest in the equity of private companies, in exchange of payments of dividends over time, as well as a profit when the company is sold. CrowdedHero is based in Riga, Latvia, and was founded in 2019 but started to offer investments in 2022.

As I mentioned in the introduction, they are different from other equity crowdfunding companies as they provide a clear path to the dividend distributions & to the exit payouts, as well as only offering to invest in already running companies, whereas most of the other equity crowdfunding platforms offer to invest in companies at the startup stage where there is sometimes no revenues at all.

They are a therefore a relatively new platform, however they are partners with the Eventus Group, which is a large player in the corporate finance field in Europe and active since 1997. 

What returns can I expect from investing on CrowdedHero?

Whereas the actual revenue you can expect on the platform completely depends on which companies you invest in, in general the goals set by the companies funded by CrowdedHero is to double in size over 5 years, which corresponds to an annualised yield of around 15%, which is above of most Peer-to-Peer lending platforms for example. 

On top of that, you will also have dividend distributions from the companies that you invest in - but as CrowdedHero just launched their first project when writing this review the dividend yield is currently difficult to estimate. However it's important to note here that CrowdedHero is focusing on companies in emerging markets in Europe, meaning that you can expect higher returns compared to equity crowdfunding platforms that are funding companies in Western Europe for example.

In terms of fees, they take a 1.25% fee when investing in projects, as well as a 5.5% fee on dividend distributions, and 9% on the net profit when a company is sold.

Is it safe to invest on CrowdedHero?

The question of the safety of the investors funds is central when investing on equity crowdfunding platform, as they will be managing all the money that you deposit on the platform and invest it in the companies that you select. When reviewing a new platform before adding it to my portfolio, I look at three things: what the platform offers in terms of guarantees, the company itself (and their team), and finally how the companies listed on the platform are picked.

Risks & guarantees on CrowdedHero

On CrowdedHero, most of the risk is coming from which companies you will actually invest in, which we will discuss more in details at the end of this section.

CrowdedHero itself is a regulated company and has been supervised since 2022 by the Financial & capital market commission in Latvia. They are also using Lemonway to handle all the cashflow on the platform during the investment process, which is a very well known company in the field that many other platforms use.

They also have a very strict KYC process that we'll cover more in details when we will talk about how to open an account & start investing on the platform.

Finally, they also have an European crowdfunding service provider license that they received in 2022, which is also a very good sign.

The company & the team

CrowdedHero is a company operating from Riga, Latvia. As for all platforms as I invest on, I checked that they are actually registered in that country, and they are.

They also are completely transparent about their team on their website, with a complete description of the role of each person in the team, which is also something I appreciate seeing on a platform. 

I for example checked the profile of the co-founders of the company, the first one being Sandris Rugums:

As you can see, he definitely has a strong experience in the field, having been a partner at Eventus Group for over 24 years.

The second co-founder of the company is Jānis Blaževičs:

We can also see that he has a good track record in the field of finance - having worked as a private banker for over 8 years.

Therefore, it's safe to say that the company is definitely ran by people with a strong experience in the field.

Funded companies

When I invest on a platform, I always have a very close look at where the projects that people can invest in are coming from, as most of the risks will come from here. 

In the case of CrowdedHero, the "projects" you can invest in are companies in which you become a shareholder after investing. As I already mentioned before, usually companies on such platforms are at a startup stage, and statistics show that only 1% of those companies will have a successful exit, and 5% only will pay a dividend.

On CrowdedHero, everything is much different. The companies that are listed on the platforms are already vetted by the Eventus Group, and have passed this startup stage. This means that they have to present a clear plan for an exit within 5 years, and a clear strategy to pay dividends to investors. They also need to make a plan detailing what they will do with the investors money.

Therefore, all those points combined makes it much safer to invest on CrowdedHero than on other similar equity crowdfunding platforms.

Getting started with CrowdedHero

Let's now see how to get started with CrowdedHero & start investing on the platform.

The first step is to open an account and get verified:

This was done relatively quickly, and it was all done within 5 minutes including the KYC part. What I didn't like so much at that stage is that it asked for two pieces of identification, which is something I rarely see on platforms and I know might deter some people to create an account.

Next, you will have to deposit funds in your account to start investing in projects on CrowdedHero. This is also easy to do as well, with a simple bank transfer.

Once this is done, you will be able to start investing on the platform. That's really easy to do on CrowdedHero, as you can browse available projects from the main Invest page:

When I started to invest on the platform, there was only one project available on Crowdhero, so we'll use this one as an example. To learn more about a project, simply click on it:

You will then be able to access much more information about the project, and also about the financial plan of the company. Here for example, the first project on CrowdedHero was The GeGe, a baby diaper subscription service.

It's really easy to learn about the company growth strategy (which is a requirement on CrowdedHero):

You can also see what they plan to do about the exit & dividend distributions:

Then, once you want to invest, simply enter how much you want to invest, and validate your investment. It's also important to notice that the platform does not have access to the transferred funds - they are kept in a dedicated Lemonway account. Then, only once the project owner actually put the shares to your name the money will be transferred to the funded company bank account.

Note that you can invest from just 100 Euros, which is on the lower end for such platforms, so that's great to get a diversified portfolio on CrowdedHero.

At the moment, CrowdedHero does not offer a secondary market, however this is something that is planned for a near future. The platform also does not offer an auto-invest feature, but this is something that would not make much sense on such a platform anyway as you usually want to pick the companies that you will become a shareholder of.

My Own Returns with CrowdedHero

Having discovered the platform only in 2022, it's of course way too soon to speak about my own returns with the platform. However, I will definitely invest in more projects as they become available, and I will of course update this article accordingly.