Equity crowdfunding is a method of crowdfunding that allows creators and entrepreneurs to source investments from a crowd of investors.
This form of crowdfunding is a big deal because it gives early-stage companies more access to capital — and if the company is successful — investors can generate impressive returns.
Of course, these are high-risk, high-reward investments. Like every startup company, those using equity crowdfunding must be prepared to fail.
Still, for investors that make informed choices and companies with a thorough understanding of best practices, equity crowdfunding offers an excellent opportunity for both parties to enjoy the rewards of success.
If you want to know how some hugely successful startups are raising money with equity crowdfunding, check out this free online course, which includes the exact framework great crowdfunders use to raise funds, get investors, pick the right platform, and more!
Before you get started on your equity crowdfunding campaign, it helps to have plenty of data about crowdfunding to inform your choices.
In this article, we’ll take you through some key equity crowdfunding stats from 2023.
2022: Year in Review
First, let’s look at the state of equity crowdfunding at the end of 2022.
Notable regulation crowdfunding stats from last year include:
- A total of $494 million were raised through reg CF over 33 active platforms.
- WeFunder, StartEngine, and Republic were the most popular equity crowdfunding portals.
- The average investor check size was $1,256.
- There were a total of 394,354 total reg CF investments.
- Reg CF raised a total of $80 million
Equity crowdfunding made a huge difference for a lot of startups in 2022.
Here’s how the trend has continued into 2023.
Top Equity Crowdfunding Campaigns of 2023
2023 isn’t over yet, but some startups are already making a major splash.
These companies showed an impressive understanding of equity crowdfunding best practices, earning them plenty of capital and hearty returns for their investors.
Alpha Motor is an automatic technology company that manufactures electric vehicles using patented technology.
They were off to an auspicious start in 2020, when they received over 52,500 vehicle indications. In 2023, they took to StartEngine to gather funds for pre-production vehicle development.
By the end of their campaign, they had raised nearly $5 million from 596 investors who were excited to see the future of independent electric vehicles.
Rentberry began using Republic in May 2023 to find investors for their global automated home rental platform.
On their page, Rentberry described the lack of innovation in the home rental industry and explained how their platform aimed to simplify the process for both tenets and landlords.
They set their investment minimum at $250 and investors began pouring in!
At the time of writing, they have raised over $2 million from 465 investors, far exceeding their initial $50 thousand goal.
Equity Crowdfunding Growth
The world of equity crowdfunding has continued to expand yearly since its inception over a decade ago when the idea of startups raising capital from the crowd was virtually unheard of.
In 2016, the lending market accounted for 70% of the entire industry. While this remains the primary method of crowdfunding, things are changing in favor of an equitable approach.
Forbes predicted in 2021 that as crowdfunding became less stigmatized, it would experience a massive amount of growth in the coming decade, and as of 2023, this has all but been confirmed.
According to the latest data, the global crowdfunding market is projected to grow from $1.25 billion in 2022 to $1.41 billion in 2023, and then to a further $3.62 billion by 2023. This makes the projected compound annual growth rate for crowdfunding an impressive 14.5%.
The future is bright for crowdfunding as a whole, and that includes Reg CF.
Yahoo Finance reports that the first quarter of 2023 was particularly fruitful for Reg CF, which saw a 60% increase from its low point at the end of 2022.
In February 2023 alone, Reg CF raised a total of $31.8 million globally, nearly doubling the $18.6 million it raised in December 2022.
All signs point to further growth for equity crowdfunding, which could overtake the traditional lending market in the coming years.
In conclusion, Reg CF shows no signs of slowing down.
Read the full article: https://www.crowdcrux.com/equity-crowdfunding-stats/