24 May Crowdfunding Grows Up and Goes Mainstream, But We Still Await Title III
It’s no secret that crowdfunding is becoming more of a mature investment opportunity for not only investors but a growth opportunity for startup businesses. In addition to its maturity, crowdfunding is also becoming more mainstream…for both investors and startups alike.
Crowdfunding Still Maturing.
One particular area that has seen a great deal of growth and popularity is equity crowdfunding. Equity crowdfunding is making major waves in the realms of small business finance and for investors. Crowdfunding used to involve lifestyle businesses, restaurants, and most business-to-consumer oriented businesses. However, equity crowdfunding is now stretching across the investor landscape.
What About JOBS?
Although we still await the full approval of the JOBS Act to really see equity crowdfunding take off, both accredited (and soon non-accredited) investors have a chance to review startup and established business deals for opportunities.
In fact, did you know that currently there is an estimated 8.7 million accredited investors in the United States? This is a huge pool of opportunities for the taking. Various portals and equity crowdfunding marketplaces exist where businesses seeking funding can combine the power of their personal connections with the power of the Internet in a meaningful way.
What Does Equity Crowdfunding Mean for Businesses?
We’ve talked a lot about how equity crowdfunding attracts both businesses and investors, but what does this actually mean for businesses? What are the benefits to equity crowdfunding for startups?
Equity crowdfunding pools resources and capital from a group of investors—typically who fit into a particular niche market, one that fits the startup entity. Equity crowdfundign can fill the gap for startups, which are finding difficulty acquiring startup resources to further grow and develop their businesses.
A professional crowdfunding firm can help properly structure equity crowdfunding deals to ensure the best possible liquid outcome and capital raising occurs for both investors and founders. Additionally, an equity crowdfunding expert can diversify portfolios across various levels—such as geography, region, market sectors, and even networks, maximizing growth and investment opportunities.
While crowdfunding is growing up, we’re still not there yet as Title III has yet to make its complete debut. Even when it does, growing pains will still be likely.