You should consider equity crowdfunding

Equity crowdfunding is a relatively new form of financing that allows entrepreneurs to raise money from a large pool of investors through online platforms. Here we explore the history of equity crowdfunding, the most popular platforms in the industry, and why both investors and founders should consider using it.

History of Equity Crowdfunding

Equity crowdfunding can be traced back to the Jumpstart Our Business Startups (JOBS) Act of 2012, which was signed into law by President Barack Obama. The JOBS Act created a new category of securities offerings, known as Regulation Crowdfunding, which allowed startups and small businesses to raise up to $1 million in capital from individual investors through online platforms.

Since the passage of the JOBS Act, equity crowdfunding has become an increasingly popular way for entrepreneurs to raise capital. According to a report by Crowdnetic, a leading crowdfunding data and research platform, the global equity crowdfunding market grew from $1.1 billion in 2013 to $3.25 billion in 2016.

Most Popular Equity Crowdfunding Platforms

There are now dozens of equity crowdfunding platforms operating around the world, each with its own unique features and focus. Here are a few of the most popular equity crowdfunding platforms in the industry:

1. SeedInvest: SeedInvest is a leading equity crowdfunding platform that has helped over 200 startups raise more than $100 million in funding. The platform offers a range of investment opportunities, including early-stage startups, real estate, and funds.
2. Republic: Republic is a crowdfunding platform that focuses on mission-driven startups and social impact projects. The platform has raised over $150 million for more than 300 startups and has a strong emphasis on community building and engagement.
3. StartEngine: StartEngine is one of the largest equity crowdfunding platforms in the world, having raised more than $400 million for startups since its launch in 2015. The platform offers a range of investment opportunities, including equity, debt, and revenue-sharing agreements.
4. Wefunder: an online equity crowdfunding platform leading the charge at positioning ECF as a "community round."

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Why Investors and Founders Should Consider Equity Crowdfunding

Investors and founders alike should consider equity crowdfunding as a potential source of funding or investment for several reasons.

For investors, equity crowdfunding offers a unique opportunity to invest in early-stage startups and small businesses that may not be accessible through traditional investment channels. It also allows investors to support causes or missions they care about and potentially earn a return on their investment if the company is successful.

For founders, equity crowdfunding can be a great way to raise capital without giving up equity or control of their company to venture capitalists or angel investors. It also allows founders to build a community of investors and supporters who are passionate about their mission or product.

In addition to the financial benefits, equity crowdfunding can also provide a valuable form of market validation for founders. By raising money through a crowdfunding campaign, founders can gauge interest in their product or service and get valuable feedback from their investors and supporters.

It's only going to get bigger...

Equity crowdfunding has quickly become a popular and viable alternative to traditional financing channels for both investors and founders. With a growing number of equity crowdfunding platforms available, it's important for entrepreneurs to do their research and find the platform that best fits their needs and goals. As the equity crowdfunding industry continues to grow and evolve, it's likely that we'll see even more innovative and exciting opportunities for startups and investors alike.