Tech Talk: Compiling the Equity Crowdfunding Numbers


Many are familiar with crowdfunding, with a version of that – equity crowdfunding – formalized with the Jumpstart Our Business Startups Acts (Jobs Act). Equity crowdfunding is defined as the “process whereby an entrepreneur, start-up or established business raises funds over the internet by offering and selling securities in exchange for an investment (stock, debt, revenue-sharing agreements, etc.) in their company.”

Here are some numbers regarding the progress since this portion of the Jobs Act went into effect in May 2016. For the first 100 equity crowdfunding campaigns:

  • Approximately 33% of companies were mobile app/internet services companies
  • Approximately 12% were consumer gadget companies
  • Approximately 60% were in business one year or less
  • A majority of companies was pre-revenue stage with a valuation of between $1.5 million and $4 million

A separate analysis of year one (May 2016 to May 2017) found:

  • Approximately 88% of filings were made by firms that were five years or younger
  • Approximately one-third of firms were six months or younger when they launched their crowdfunding campaign
  • Nearly 50% of firms were located in California, Florida or Texas
  • A total of 326 companies filed offerings during that span, including 17 businesses that conducted more than one crowdfunding campaign
  • The 326 companies employed a total of 1,574 employees (approximately five employees per firm)

Finally, a January 2018 summary from Crowdfunding Insider reports:

  • As of today, more than $100 million in capital commitments
  • 731 campaigns
  • 100,901 investors
  • Average is $992 per investment (up from $750 when the industry started)
  • Average raise is $360,691 (up from $250,000 when the industry started)
  • Total jobs supported is 3,608
  • It took 410 days for the industry to break $50 million and 209 days (50% less time) for the industry to raise the next $50 million

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