2020 Proved To Be An Inflection Point for Crowdfunding
- January 8, 2021
- Posted by: Kirsten Campbell
- Category: Blog
Put some respect on my name
Santa wasn’t the only one working hard over the holidays. Our friends at Crowdfunding Capital Advisors crunched the 2020 numbers and wowzer. Not only did crowdfunding smash records this year, but it looks like it will serve as DigitalAMN’s launching pad for a record-breaking 2021.
The financial fallout from the pandemic forced a shift in focus from more traditional financial avenues of Wall Street and venture capital, to the crowdfunding arena. Freshly anointed by the SEC, crowdfunding has turned a corner and proved capable of taking on the heavy lifting of funding small businesses and getting Americans back to work. Check out the highlights from the Crowdfunding Capital Advisors report.
From 2019 to 2020:
- Capital commitments increased 77.6%
- 58.6% more unique companies raised money
- There was a 75% increase (over 150K) in investors
- The average raise increased approximately $10K, helping propel entrepreneurs over the Valley of Death
- The average success rate for companies raising money was 63.7% vs 2% over in venture capital
- Silicon Valley didn’t have all the fun. New York, Texas, Massachusetts and Florida joined California as the top 5 states seeing the most crowdfunding activity
This data reveals a practical, secure financial ecosystem that rewards ingenuity, creativity and functions to empower the 99%. It sounds like the American Dream may have migrated over to the crowdfunding ecosystem while everyone had their eye on Wall Street!
Crowdfunding rose like a phoenix from the financial ashes of a pandemic that kneecapped VC, but it shouldn’t be the panacea. Assistance from federal co-investment funds would turn on a firehose of much needed capital to support small businesses left floundering, and quickly get Americans back to work. Micro-lending programs like TruCrowd Services, LLC’s Keep The Light On are available to provide assistance to mom and pop shops and close the funding loop for the Main Street recovery.
Conveniently online, the modern crowdfunding ecosystem seamlessly met the surge of activity that followed in the wake of the pandemic, shuttering Main Street in the spring and kept pace throughout 2020. Not only is crowdfunding here to stay, but it’s proving capable of ramping up quickly and getting money into small businesses and communities left struggling across America. While quite effective on its own, crowdfunding could be turbocharged in 2021 with just a little help from its friends.
If you’re curious to learn more about investing in and via equity crowdfunding, check out TruCrowd’s online investment portal
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