Crowdfunder, an equity crowdfunding platform commonly used by tech and digital media startups, has raised $3.5 million in a Series A round.

Most of the money will go toward product development and scaling the company, said Chief Executive Chance Barnett.

The Venice startup differs from, say, Kickstarter or Indiegogo in that its investments come in exchange for equity in a startup. Barnett pointed out that VR tech firm Oculus and its rewards-based Kickstarter campaign gave funders posters, T-shirts and Oculus Rift prototypes for financing the company. Many of those early supporters were peeved when the company was sold to Facebook for $2 billion, leaving them only with T-shirts to show for their early backing.

“There was a backlash,” he said. “People were saying, ‘Hey, we missed an opportunity. We could have made money too if we had the opportunity to be investors.’”

Crowdfunder aims to give that opportunity to the broader public. Anyone with $1 million in assets or an income of at least $200,000 a year for the last three years qualifies as an accredited investor. Crowdfunder’s financial backers include 500 Startups, Good Magazine Chief Executive Ben Goldhirsh and Singularity University Chief Executive Rob Nail.

Participating companies can choose the size of the investments they will accept, currently ranging from $1,000 to $50,000. Barnett said Crowdfunder helped back 32 companies over the last three quarters. The average deal size was $1.6 million.

“It’s an opportunity for everyday people who aren’t experts, who don’t have giant VC funds, to invest and have the same opportunities,” Barnett said.

Bridge 37 Ventures and Ideas & Capital Venture Capital led the Series A round. Crowdfunder raised $1 million in seed financing earlier this year.

Staff reporter Melissah Yang can be reached at MYang@labusinessjournal.com. Follow her on Twitter @MelissahYang for the latest in L.A. tech news.

For reprint and licensing requests for this article, CLICK HERE.