Crowdfunding Return Calculator
Crowdfunding net return.
Calculate crowdfunding investment net returns after defaults and fees. Enter investment amount to see net crowdfunding returns after defaults and platform fees.
What this tool does
This calculator models the net internal rate of return (IRR) from a crowdfunding investment after accounting for losses and platform costs. It takes your investment amount, projected gross annual return, expected annual default rate, platform fee, and holding period, then estimates what you actually earn once defaults and fees are deducted from the gross yield. The net return is sensitive to both the default rate and annual fee—higher either one, and your take-home return falls noticeably. A typical use case: estimating actual returns from a peer-to-peer lending platform where stated yields are attractive, but platform fees and borrower defaults reduce the final outcome. The calculation assumes constant rates across the holding period and doesn't account for reinvestment timing, tax treatment, or early withdrawal penalties. Results are illustrative and based on the inputs you provide.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Crowdfunding investment return calculator factors in projected returns, default rates, and platform fees. Property crowdfunding (Octopus, Crowdproperty) typically advertises 7-10% gross returns. After 2-5% defaults and 1-2% platform fees: 4-7% net returns. Equity crowdfunding (Seedrs, Crowdcube) much higher variance - mostly losses with occasional 10-100x winners.
Example: 10,000 invested in property crowdfunding at 8% gross, 3% defaults, 1% platform fee = 4% net return. Over 5 years: 12,167 future value. 2,167 net gain. Same 10,000 in S&P 500 at 7%: 14,026. Crowdfunding underperformed despite higher 'gross' yield because of default and fee drag.
Property crowdfunding risks: illiquidity (locked 1-5 years), platform failure (unregulated by FSCS), borrower defaults (especially during downturns), fees buried in small print. Equity crowdfunding (startup investing): 70-80% complete losses, 10-20% modest returns, 5-10% big wins. Diversify across 20+ deals minimum. Both unsuitable for emergency funds - illiquid and risky despite marketing claims.
A worked example
Try the defaults: investment amount of 10,000, projected gross return of 8%, annual default rate of 3%, annual platform fee of 1%. The tool returns 12,166.53. 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 Investment Amount, Projected Gross Return %, Annual Default Rate %, Annual Platform Fee %, and Investment Period. 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
Net rate = gross rate - default rate - fee. Future value compounded at net rate. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Using this well
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.
££10,000 at 8% gross, 3% defaults, 1% fees over 5y = 12,166.53.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator computes the future value of a crowdfunding investment by applying compound growth at a net annual rate. The net rate is derived by subtracting the annual default rate and platform fees from the projected gross return, all expressed as percentages. The resulting net rate is then compounded over the specified investment period to project the final portfolio value. The model assumes a constant net growth rate throughout the holding period and treats defaults and fees as ongoing annual deductions from returns. It does not account for variable returns across years, the timing or sequence of defaults, tax implications, reinvestment mechanics, or changes to platform fees. Results represent a simplified projection based on the stated inputs and should not be treated as a forecast of actual outcomes.
References
Frequently Asked Questions
Realistic crowdfunding returns?
Liquidity considerations?
Platform risk?
Tax treatment?
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