Today the SEC passed rules to implement Title III of the JOBS Act marking the start of true equity crowdfunding including non-accredited investors.
This is a momentous shift as it will be the first time in 80 years that everyday citizens will be able to invest in early stage companies.
This will have massive implications for both the entrepreneur and investor alike as it will open up a tremendous amount of new capital to startups while allowing investors to further diversify their portfolio.
Title III is slated to go live in 90 days and here’s what to expect.
Investing is inherently social. Investors are investing in the founders and their team just as much as the idea. That is why we made it easy to interact with Founders and Investors through our new Follow and Messaging functionality.
Now it will be easier than ever to interact with your Followers and Message them relevant news and updates about the business. This will lead to more Investors engaged around Deals and eventually more deals funded as a result.
Check out the new Follow and Messaging tools to see how you can start leveraging it to grow your network.
There’s an age old question in wealth management and investment advice: Man or Machine. Today the battle has begun.
Over the last six years, a related segment of FinTech that has received a lot of attention, and a fair share of controversy, is automated investment services… or what are frequently called “robo advisors.”
These technology-backed advisors were built on the premise that many of the activities performed by a Registered Investment Advisor (RIA) can be replicated by advanced intuitive software. They promise lower costs, simplicity and even the bonus potential of making investing “fun”.
The Crowdfunder Network has over 100,000 entrepreneurs and investors that are constantly connecting to fund deals. We make it easy for investors to find deals that fit their unique investment portfolio and allow them to connect directly with CEO’s.
When an investor comes onto our platform, they can self verify their accredited investor status, which gives them access to all the deals on the platform. There are several ways you can qualify as an accredited investor.
As investments into FinTech startups quadrupled from 2013 to 2014, and continue to grow, I recently shared Top Trends in FinTech surrounding the four FinTech areas undergoing massive change and disruption: Fundraising, Payments, Deposits & Lending, and Cryptocurrency.
In this article I’ll dive deeper into Fundraising and the tremendous change and innovation happening within, as I know this area well as the CEO of equity crowdfunding platform Crowdfunder.com and my involvement with JOBS Act legislation and regulations.
Over the past couple years, we’ve seen massive growth within the crowdfunding industry. Just five years ago there was a relatively small market of early adopters to crowdfunding online at a reported $880 million in 2010. Fast forward to today where $16 billion was crowdfunded in 2014, with 2015 estimated to grow to over $34 billion.
These numbers show the exponential trajectory of this newly emerging market. Investments will move from conference rooms to online platforms as more accredited investors and entrepreneurs use this shift to their advantage. In this post you’ll learn about Crowdfunder and how you can start investing in startups.
Investments into FinTech startups recently quadrupled, growing from just over $3 billion in 2013 to over $12 billion in 2014. And consider alongside that another trend showing that crowdfunding will surpass VC in 2016 as a funding source–given that crowdfunding itself is a segment of the FinTech market.
The growth of capital being invested in FinTech startups underlies how technology and the Internet are radically changing the nature of money and financial services. From the ways that people save, to how they spend, to the tools they use to invest their money – all of these are changing more rapidly today than ever before.
Startup investing and fundraising is moving from the boardroom to the deal room (online) as new laws for equity crowdfunding in the U.S. have come into effect over the last two years.
Prior to this, traditional fundraising has been a fractured process that takes place across hundreds of private emails, calls and in person pitch meetings. But now, early stage venture capital is being disrupted and moving online in a more public way.
The data shows that of the 8+ million qualified (accredited) investors in the U.S., only an estimated 3% have ever invested in a private startup. But now the opportunity has opened up for more of this group to invest online with experienced professional investors.
Alongside this, tens of thousands of startups are opting to use the web and equity crowdfunding to find, pitch and close investors.
Yet as CEO of Crowdfunder.com and an early participant in JOBS Act legislation, I’ve watched a surprising “private market” trend develop where startups choose a more closed and non-public route of equity crowdfunding, even though they have more public option available to them.
To understand this trend and what it means for startup founders and investors, you’ll need a brief background.
In a few short years crowdfunding has grown from a small creative concept into an estimated $15+ billion industry during 2014 and a true “revolution in fundraising” according to Peter Diamandis of the XPRIZE Foundation.
What’s more, each year the dollar amount crowdfunded roughly doubles.
With that as a baseline, the overall market is further accelerating as we’ve now added to the existing market for rewards-based crowdfunding with the newer ‘equity crowdfunding’ in the U.S. This was initially only available to accredited investors, which came into play last year under Title II of the JOBS Act, and now non-accredited equity crowdfunding under Title IV of the JOBS Act where everyone can invest.
While crowdfunding has become an incredible way to generate awareness, pre-sell new products, or raise equity funding for a startup, creating a new company and brand isn’t the only opportunity available with crowdfunding…
Crowdfunding also represents a huge opportunity for existing “household” brand names and consumer-facing companies to bring older, yet well known brands, back into the marketplace.