Reg CF: Investment Crowdfunding Tops $1.1 Billion in 2021, Predicted to Double in 2022

Susan ECO Support CfPA Support & News Scout, CfPA Support
Posted on 12/31/2021 8:35:35 AM

Nice headline to end the year ...

Crowdfund Capital Advisors (CCA), a research and advisory group tracking online capital formation under Regulation Crowdfunding (Reg CF) in the US, is reporting that since the industry launched over $1.1 billion has been invested for firms issuing securities under the exemption.

Some other highlights from the article: 

CCA shared some of the headline data points for Reg CF, including:

  • Investments into startups and small businesses up 140% over 2020, shattering last year’s record, exceeding the projection of $500 million invested, and leading CCA’s Online Investment Index to record highs.
  • Total financing in 2021 exceeds all investments from 2016 through 2020.
  • More than 540,000 investors participated in over 1,500 offerings. More than 2019 and 2020 combined.
  • The average raise across the industry is an all-time high of $450,000 from a low of $200,000 in 2018 as the number of jobs supported/created among these issuers reaches 100,000.
  • In March, SEC updated the maximum issuers can raise from $1 million to $5 million, the industry then surpasses $1B in funded capital in October.
  • Follow-on crowdfunding rounds were raised by over 500 issuers.
  • The market value of crowdfunded companies jumped to $33 billion as median valuations hit record highs.
  • 68.4% of offerings were successful and closed within 8 months, which is higher and faster than “traditional” VC round timelines. The average closing time tightened in 2021 to 7 months.
  • VCs & Y-Combinators jump into the space both co-investing and syndicating offerings providing further validation.
  • The number of $1 million+ offerings hit record highs with several $5 milllion+ rounds proving Reg CF a viable “Silicon Valley-sized Seed round.”
    Issuers used 43 intermediaries to raise crowdfunding facilitated capital, up 10% over 2020. Wefunder, StartEngine, Republic, and SeedInvest, accounted for over 80% of all the funding.

Happy New Year everyone!