January 12, 2016
Crowdfunding is a way for businesses or other organizations to raise money in the form of either donations or investments from multiple individuals. This new form of capital formation emerged in the wake of the 2008 financial crisis.
The report talks about the accelerated growth in global crowdfunding, various crowdfunding models, key players in the industry, business/technology trends and regulations in the sector.
Global crowdfunding has seen tremendous growth for the last couple of years and reached the $34.4-billion mark in 2015.
The lending category of crowdfunding is exploding in the US. Other popular crowdfunding platforms are donation-based funding, rewards-based funding and equity-based funding.
In the US, the lending-based crowdfunding model is the most popular and has a considerable market share in the industry. With regard to the increasing attention from small and medium businesses, it is estimated that the coming year’s crowdfunding platforms have potential to grow exponentially.
Crowdfunding has exploded as a new way to raise funds for startups, inventions, nonprofits and even real estate investments. The report highlights some of the top crowdfunding websites for nonprofits, equity crowdfunding, peer-to-peer lending, peer-to-peer fundraising, personal fundraising and more.
The report also talks about latest market and technology trends in the growing crowdfunding market. Here are the key trends driving the crowdfunding industry:
- InvestTech in and access to private equity are growing rapidly. The JOBS Act inspired new funding models, which have led to new crowdfunding opportunities, including private equity investing by unaccredited investors and peer-to-peer lending for all investors.
- The variety of opportunities available to investors is increasing. Through online platforms, accredited investors now have access to different sectors.
- Equity crowdfunding is gaining popularity among investors. It means borrowers are looking for more transparency and enhanced communication tools and techniques.
- Institutional-grade information and deals are increasing. The online crowdfunding platforms provide individual investors with institutional-grade information and deals, allowing investors to use private equity and debt to diversify their portfolio.
- InvestTech clubs are also moving online and getting involved in social investing.
- Firms are making use of blockchain technology, combining it with equity crowdfunding to provide digital solutions.
The US crowdfunding industry hit a major milestone after SEC passed JOBS Act which allows non-accredited investors to participate in equity crowdfunding and investment in private startups and small businesses.