In recent years, the majority of the financial marketplace has moved online, thanks to regulation crowdfunding. Entrepreneurs can now tap into their social networks, to showcase their business plans, ideas and pitch decks to raise capital. Investors like you and I are now able to receive equity in these startups. Successful crowdfunded companies are a “proven jobs engine” which on average, can create and support a total of 54 direct and indirect jobs.
Year one: A success
The data has finally arrived! June 30, 2017 marked a special date, because it officially marked the end of the first full fiscal year of regulation crowdfunding. The inaugural year kicked off to a healthy start, with almost 400 campaigns receiving a total commitment of $51.3 million. In fact, as a New York-based company, DigitalAMN was proud to learn that our state is actually a hotbed of regulation crowdfunding! New York has engaged 3,900 investors and carved out an early lead as one of the top states for total funds raised, with a whopping $2.7 million in the first year. An excellent showing right out of the gate!
Meanwhile, across the pond in the UK
While regulation crowdfunding is relatively new to America, it has been utilized in the UK for years. They’ve collected very detailed data which showcases the value of regulation crowdfunding. In fact, it has rapidly become the startups’ and entrepreneurs’ chosen method to raise funds. In the UK, regulation crowdfunding makes up 17% of total seed and venture equity investments. To add perspective, there are approximately 5.4 million small and medium companies in the UK, and these businesses account for ⅔ of jobs created since 2008 and employs over 10 million people. It’s clear that regulation crowdfunding gives entrepreneurs access to capital and creates jobs for people. Both investors and small businesses win in the regulation crowdfunding ecosystem, but the biggest winner is the local community.
It’s a community affair
Communities rally around businesses they’ve invested in. Each investor has a strong incentive to ensure the business performs well, essentially acting as marketers. Talk about a passionate and engaged promotional network! There are numerous social benefits and the local economy benefits the most from the influx of money that circulates. Since the Great Recession, equity crowdfunding has pumped nearly $1 billion into local economies and shows no signs of slowing down.
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