Equity Crowdfunding Return Calculator

Equity crowdfunding return calculator models portfolio outcomes from startup investing platforms (Seedrs, Crowdcube, Republic, AngelList). Power-law distribution: 60-80% complete losses, 5-10% modest returns, 5-10% deliver 5-50x outcomes that drive portfolio returns. 20k spread across 20 deals at average winner 8x with 70% failure rate: 6 winners × 1k × 8 = 48k portfolio value, 2.4x MOIC.

Example: 20,000 spread across 20 deals (1,000 each). 70% failure rate (14 deals to zero). 6 winners at average 8x = 48,000 portfolio value. 28,000 net gain. Over 7 years = 13.3% IRR. Diversification matters mathematically: a single 20,000 deal at 70% failure probability has negative expected value before any portfolio effect. Spreading the same capital across multiple deals reduces the variance, which is the structural advantage retail crowdfunders have.

Equity crowdfunding tax benefits: SEIS (Seed Enterprise Investment Scheme) - 50% income tax relief on 200k/year max, capital gains exempt if held 3+ years, loss relief offsets failures. EIS - 30% income tax relief up to 1M/year. Combined: even portfolio with 50% failure rate can be net positive after tax relief. Without SEIS/EIS: equity crowdfunding rarely beats S&P 500 risk-adjusted. Investing via tax-advantaged structures where available.

A worked example

Try the defaults: total portfolio investment of 20,000, number of deals of 20, expected failure rate of 70%, average winner multiple of 8. The tool returns 13.32%. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Total Portfolio Investment, Number of Deals, Expected Failure Rate %, Average Winner Multiple, and Hold Period (years). Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

The formula behind this

Winners count × per-deal investment × average winner multiple = portfolio value. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.