I recently read some research done by Crowdfund Capital Advisors, an authority in the regulation crowdfunding space, and co-author of the original JOBS Act in 2012. This report summarizes the volume of activity that happened on the Title III crowdfunding portals regulated by FINRA in 2016. Regulation crowdfunding, which first made it legal for mom-and-pop non-accredited investors to invest in early stage startups, first went live on May 16, 2016, so the below research only reflects partial year results. And, the below does not include activities happening on non-regulated crowdfunding activities operating under the Title II and Title IV platforms, which includes bigger crowdfunding platforms like Angel List, who serve accredited investors with net worths in excess of $1MM. Nor does it include the crowd donations sites like Kickstarter and Indiegogo, where even more money is flowing.
My interpretation was, based on this small Title III sub-segment of the market, still in its infancy, which can be further extrapolated across the broader crowdfunding landscape: money is flowing, startups are growing and jobs are being created, just as originally hoped for when the JOBS Act was originally conceived. To pound that point home, on Kickstarter alone, it has helped almost 119,000 projects raise over $2.8BN since it has launched, and claims its projects created over 300,000 new jobs in 2016 alone.
CCA's Principal Woodie Neiss is a colleague of mine, and he was kind enough to let me share CCA's learnings with all of you below.
21 regulated platforms launch; 1 dies
42% of campaigns succeed
Investors invest $833 per deal, on average
Average funds raised per company is about $227,000
Valuations are in line with VC funded companies at $5.3MM
Creating 2.2 jobs per company in first 90 days
Thanks again, Woodie, for letting me share your research with our readers. Be sure to re-read this old post on The Birth of Crowdfunding Agencies, to learn how to successfully launch a crowdfunding campaign of your own, and take advantage of this great channel for your fund raising needs.
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