In this article I’ve highlighted some of the most critical factors that drive successful startup fundraises online.
For a brief refresher, it was just over a year ago (September 2013) that we saw Title II of the JOBS Act kick off and unleash a powerful new market for startup funding online, also referred to as equity crowdfunding.
This new capital market created under Title II is showing rapid growth, even while the opportunity to invest is currently limited to accredited investors and institutions.
Restrictions keeping everyday people (non-accredited investors) from participating may be lifted at some point under Title III of the JOBS Act, though regulators have stalled to release final rules.
That said, startups and investors are not waiting on Title III. The new startup funding market is off to the races. Technology and automation are rapidly transforming the way investments in startups and small businesses are done – driven primarily by a few leading equity crowdfunding platforms.
Today we are seeing everyday individual investors getting to invest alongside VCs and super-angels online, often in the same deals and at the same terms as some of the worlds most experienced early stage investors.
According to Kay Koplovitz and her article on the impact of the first year of equity crowdfunding, estimates for the startup funding commitments made online were estimated at over $217,000,000 in equity and debt. The sectors leading the way were the technology and real estate sectors.
Within these funding numbers are a variety of potential signals for what leads companies to succeed with raising startup funding online. Here are some of the potential signals and success factors that drive startup funding online.