Crowdfunding: Going to the Moon and Back to Support Small Businesses
- March 8, 2021
- Posted by: Kirsten Campbell
- Category: Blog
And February just wrapped up!
2020 was a rough year for the 99.7% of small businesses across the country, but thanks to online/mobile crowdfunding platforms, we’re accelerating out of this sharp corner. With the Feds now green lighting startups to raise what equates to a full round of seed funding online—$5M up from the previous $1M—the race is on.
- $43M was committed in February 2021
- Compared to January, February witnessed a 22% increase in investors
Compared to 2020, there’s been a:
- 435% surge in commitments
- 135% boost in investors
The pandemic pushed entrepreneurs to eke out new funding sources to stay afloat, making crowdfunding a lifeline of support for over 1,100 small businesses across the country.
Room for the masses
With such promising news from the red hot crowdfunding ecosystem, there’s one piece of data that’s particularly thrilling: from 2019 to 2020, 58.6% more unique firms raised money online. Why does this deserve attention? Because venture capital’s pathological focus on software means that the crowdfunding environment is ripe to fund a much wider swath of startups and more mature businesses.
Consumers buy more than just software, and the crowdfunding ecosystem understands that. Hence why creativity, ingenuity and diversity of thought are funded at a rate of nearly 63.7%, compared to 2% in venture capital. Tough choice, eh!
Sustainable funds for the future
Having proven itself as a viable funding option (during a pandemic, no less), and with the maximum limit increased by regulators—the entrepreneurial landscape has undergone a seismic shift that’s produced impressive momentum in a short period of time.
This bodes well for the private markets as well, since it offers investors more choice and price points to fit their budget and interests. Our friends at Crowdfund Capital Advisors expect that in 2021, local business communities across the US will receive more than $500M of investment dollars.
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