Just the stats, please
For many investors, it may seem like regulation crowdfunding has been around for years, but that’s not the case. It’s a relatively new industry in America, but has been active in the UK and Canada for years. The first year of regulation crowdfunding produced these stellar highlights (source):
- A 267% increase in unique offerings, from 178 in 2016 to 481 in 2017.
- A 178% increase in proceeds, from $27.6 million in 2016 to $49.2 million in 2017. By end of 2017, total proceeds were $76.8 million.
- Successful offerings increased 202%, from 99 in 2016 to 200 in 2017.
- The average success rate of offerings to date is 66.7%.
- The total number of investors increased 158%, from 28,180 in 2016 to 44,433 in 2017.
The industry is taking off
The trend is clear: Reg CF is gaining momentum, kind of like rolling a snowball downhill. It’s expected to reach $1 billion by the early 2020s, should growth continue along the same explosive rate. Between 2016 and 2017, the industry grew by 267%.
Before the JOBS Act was passed, opponents were worried that online investing through regulation crowdfunding would encourage illogical investor behavior, which has proven to be false. Investors and entrepreneurs are generally acting rationally and ethically.
What this means for the 99%
As we’ve seen, equity crowdfunding benefits local communities, especially inner cities and minority entrepreneurs. These startups would not generally qualify for bank loans, but the ability to raise capital online allows them to expand their operations and create new jobs, especially in their community.
More money circulates in the local economy, which translates to dance lessons for children in your local neighbourhoods, not a corporate jet for a CEO who must please shareholders. Think global, buy local with regulation crowdfunding.