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Blog

Crowdfunding: The New Normal?

Mihir Gandhi

The crowdfunding phenomenon is not going away. It’s not just an American phenomenon, either, with economies across the globe increasingly participating in the democratization of raising capital. Crowdfunding’s rise over just the last few years demonstrates its increasing strength and dominance in the world of fundraising and capital acquisition.

2015 Crowdfunding Research

In its 2015 crowdfunding industry report, Massolution released research data, including information from 1250 crowdfunding platforms around the world, that confirms crowdfunding is out of diapers and headed to grad school. Among the findings:

  • $16.2 billion raised in 2014 compared to $6.1 billion in 2013, a 167 percent increase

  • $34.4 billion projected for 2015, another year-over-year double

  • Lending-based crowdfunding dominated with $11.08 billion of the total for 2014

Global Reach

North America is by far the biggest contributor to these global crowdfunding volumes, but the landscape is changing here too. Those 2014 numbers released by Massolution have Asia’s increasing crowdfunding volume to thank, at least in part:

  • 320 percent increase to $3.4 billion raised in Asia in 2014

  • $3.26 billion puts Europe in 3rd place.

Most Popular Sectors

Of all the crowdfunding categories, entrepreneurship and business are the most popular, pulling in more than 40 percent or $6.7 billion. 

Most Popular Platforms

Massolution’s own directory lists more than 2900 different crowdfunding platforms. Four of the biggest, most popular, and highest volume platforms are:

  • Kickstarter: more than 13-million site visits each month, nearly 80,000 projects funded, nearly 300,000 people have supported 10 or more projects

  • IndieGoGo: more than 9-million site visits each month, does not publish stats on $$ raised but reports 44 percent campaign success rate

  • AngelList: for raising equity or debt investments specifically for startups. Accredited investors only, as of the writing of this blog post

  • GoFundMe: More than $1 billion raised from 16 million people for personal, individual causes

There are many more crowdfunding sites and platforms for many different types of companies, industry sectors, or need. It’s an industry that has changed the face of the economy, and more growth may be expected with Title IV (recently enacted) and Title III (still pending final rules) of the JOBS Act, which will open up investor eligibility to every investor. 

At the moment, investors must still be accredited to participate in most types of equity crowdfunding. Visit VerifyInvestor.com for information on how to verify your investors are accredited.