Crowdfund Capital Advisors (CCA) has shared data pertaining to Regulation Crowdfunding or Reg CF in the US. The smallest exemption facilitating online capital formation, Reg CF allows issuers to raise up to $1.07 million from both accredited or non-accredited investors. An issuer must use the services of a FiNRA regulated funding portal or broker-dealer. But things are posed to change as beginning next month, issuers will be able to raise up to $5 million – a material update – that will benefit both issuers, platforms as well as investors.
According to CCA’s numbers, in 2020 capital commitments to Reg CF issuers rose by 77.6% from $134.8 million in 2019 to $239.4 million in 2020. The average raise increased from $298,331 in 2019 to $308,978 in 2020.
The number of investors participating in offerings jumped too. In 2020, there were over 150,000 investors, a 75% increase committing more than 358,000 investments versus the year prior.
The number of offerings rose by 61.2% tallying 1149 in 2020.
The average valuation of issuers went from $11.4 million to $13 million with an offering success rate of 63.7%.
The top 5 states for issuers, investments, and investors were: California, New York, Texas, Massachusetts, and Florida.
“2020 was a terrible year for our country. However, in the face of this health and economic crisis, the online finance industry enabled over 1,100 small businesses, across 48 states and territories, to raise USD 239,000,000 from over 358,000 investors in their communities. This capital was unavailable from traditional sources and provides a model for potential public-private partnerships to support small businesses in the future. Our data suggest these numbers could double in 2021
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