Report | Feb 27, 2024

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Impact of Investment Crowdfunding: Insights from the 2024 Trends Report

Crowdfund Capital Advisors just opened up complimentary access to the “Investment Crowdfunding Trends 2024” report, a comprehensive analysis leveraging data up to December 31, 2023, offering invaluable insights into RegCF markets in the U.S., trends, and impact on the economy, business, and investors.  The article below is a snapshot of living markets.  Download the data-driven report to stay informed and learn the financing and investment opportunities in regulation crowdfunding markets to see if it’s right for your portfolio or business.

Overview of Investment Crowdfunding (up to Dec 2023)

Investment crowdfunding has emerged as a transformative force, redefining access to capital and igniting economic growth.

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• Issuers/Deals: Over 6,800 issuers with more than 8,000 deals
• Cities across the United States: Participation from over 1,800 cities
• Funded Capital: $2.2 billion
• Investors: More than 1.9 million
• Jobs Created: Approximately 310,000
• Economic Stimulus: $6.8 billion annually
• Enterprise Value: $75.6 billion
• Compound Annual Growth Rate (CAGR): 59%

Platform-Specific Insights

• Investor Count by Platform: The top 3 platforms receive most of the industry’s checks written
• Average Check Size by Platform: Fundify has the largest average check size
• Success Rate by Platform: Success rates vary, depending significantly on minimum funding targets
• $1m+ Raise Count by Platform: Wefunder leads in the million-dollar club
• Economic Stimulus by Platform: Issuers on StartEngine have the greatest economic impact

See:  U.S. RegCF Trends: Investment Engagement by Age

Business Maturity Insights

• Investor Preference: Investors generally prefer investing in established companies
• Average Check Size by Business Maturity: Larger checks are written to established issuers compared to startups
• Success Rate by Business Maturity: Established issuers have a higher success rate
• $1m+ Raise Count by Business Maturity: More established issuers are in the $1M+ club, though many startups also achieve this milestone

Other Insights

• Total Investments: Investors show a preference for funding equity issuers despite opportunities in debt
• Average Raise: Equity issuers tend to raise the most
• Investor Count: Equity investors far outweigh debt investors
• Average Check Size by Financing Type: Larger checks are typically written to debt issuers, possibly attracted to immediate returns
• Deal Count by Region: The West, particularly California, leads in deal count and investment amounts, showcasing regional disparities in crowdfunding activity
• Investments and Revenue Growth: There’s an average growth in revenue of 284.5% between the year an issuer was successful and the following year, indicating significant financial growth potential for companies utilizing investment crowdfunding

See:  Current State of Crowdfunding in Europe 2023 Market Report

• Business Longevity: Only 17.8% of funded companies have gone out of business, compared to the Bureau of Labor and Statistics report that approximately 50% of all new businesses fail within 5 years, suggesting a higher sustainability rate for crowdfunded companies
• Role in Financing: Investment crowdfunding dollars as a percentage of VC pre-seed/seed investments are increasing, highlighting its growing importance as an alternative financing source

Conclusion

This “Investment Crowdfunding Trends 2024” is data-driven proof of the sector’s resilience, potential, and transformative impact, offering significant alternative finance options for entrepreneurs, investors, and the broader economy.  Through democratizing access to capital, fostering job creation, and stimulating economic growth, investment crowdfunding stands as a beacon of progress and opportunity.   Stay tuned for an upcoming episode of Fintech Fridays podcast with Sherwood Neiss, Co-Founder of Crowdfund Capital Advisors.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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• Source: https://ncfacanada.org/cca-report-investment-crowdfunding-2024-key-insights/