The world of equity crowdfunding, also called Regulation Crowdfunding (Reg CF), is growing each year, and so far, 2023 has been no exception.
Equity crowdfunding is a method of crowdfunding that allows creators and entrepreneurs to source investments from a crowd of investors.
This form of crowdfunding is a big deal because it gives early-stage companies more access to capital – and if the company is successful – investors can generate impressive returns.
Of course, these are high-risk, high-reward investments. Like every startup company, those using equity crowdfunding must be prepared to fail.
Still, for investors that make informed choices and companies with a thorough understanding of best practices, equity crowdfunding offers an excellent opportunity for both parties to enjoy the rewards of success.
If you want to know how some hugely successful startups are raising money with equity crowdfunding, check out this free online course, which includes the exact framework great crowdfunders use to raise funds, get investors, pick the right platform, and more!
Before you get started on your equity crowdfunding campaign, it helps to have plenty of data about crowdfunding to inform your choices.
In this article, we’ll take you through some key equity crowdfunding stats from 2023.
2022: Year in Review
First, let’s look at the state of equity crowdfunding at the end of 2022.
Notable regulation crowdfunding stats from last year include:
- A total of $494 million were raised through reg CF over 33 active platforms.
- WeFunder, StartEngine, and Republic were the most popular equity crowdfunding portals.
- The average investor check size was $1,256.
- There were a total of 394,354 total reg CF investments.
- Reg CF raised a total of $80 million
Equity crowdfunding made a huge difference for a lot of startups in 2022.
Here’s how the trend has continued into 2023.
Top Equity Crowdfunding Sites of 2023
For U.S.-based companies, there are a number of online platforms facilitating equity crowdfunding, but as of 2023, three major players have consistently been at the forefront of the industry.
WeFunder
WeFunder claims to be the world’s largest equity crowdfunding portal in terms of investment volume and number of investors. In 2022, they accounted for 35% of all capital raised for Reg CF.
WeFunder has a large community of investors, with over 2 million users investing in emerging businesses. To date, WeFunder campaigns have funded nearly 3,000 startups with $633 million.
WeFunder also boasts the largest check size of any major equity crowdfunding platform, with startups receiving an average of $1,231 per investment.
StartEngine
Accounting for 26.4% of all Reg CF capital raised in 2022, StartEngine is WeFunder’s largest competitor.
Backed by Mr. Wonderful Kevin O’Leary, StartEngine has asserted itself as a major player in the equity crowdfunding industry, and it has shown continued growth and promise in 2023.
StartEngine claims to have funded around 700 campaigns with around $700 million from around 1.8 million prospective investors.
Following close behind their WeFunder counterparts, StartEngine campaigns can expect an average check size of $1,231.
Republic
Republic isn’t as well known as WeFunder or StartEngine, but with a body of 2.5 million users, it’s catching up quickly! In 2022, it accounted for 18.5% of all Reg CF capital.
The company focuses on four major categories:
- Startups
- Real Estate
- Video Games
- Crypto
As of 2023, Republic has raised capital for over 2,000 projects in these categories, with over $2.5 billion in funds deployed.
Last year, Republic campaigns received an average check size of $897 per investment.
Top Equity Crowdfunding Campaigns of 2023
2023 isn’t over yet, but some startups are already making a major splash.
These companies showed an impressive understanding of equity crowdfunding best practices, earning them plenty of capital and hearty returns for their investors.
Alpha Motor
Alpha Motor is an automatic technology company that manufactures electric vehicles using patented technology.
They were off to an auspicious start in 2020, when they received over 52,500 vehicle indications. In 2023, they took to StartEngine to gather funds for pre-production vehicle development.
By the end of their campaign, they had raised nearly $5 million from 596 investors who were excited to see the future of independent electric vehicles.
Rentberry
Rentberry began using Republic in May 2023 to find investors for their global automated home rental platform.
On their page, Rentberry described the lack of innovation in the home rental industry and explained how their platform aimed to simplify the process for both tenets and landlords.
They set their investment minimum at $250 and investors began pouring in!
At the time of writing, they have raised over $2 million from 465 investors, far exceeding their initial $50 thousand goal.
The SMART Tire Company
The SMART (Shape Memory Alloy Radial Technology) Tire Company saw a unique business opportunity in the airless tires NASA was developing for space exploration.
The SMART Tire Company wanted to make these highly durable tires commercially available for use on Earth, too, so they used WeFunder to find investors for their venture.
They launched their campaign in January with a relatively low investment minimum of $100.
As of today, they’ve raised nearly $850 thousand from 1,156 investors, and they’re still open for investment!
Equity Crowdfunding Growth
The world of equity crowdfunding has continued to expand yearly since its inception over a decade ago when the idea of startups raising capital from the crowd was virtually unheard of.
In 2016, the lending market accounted for 70% of the entire industry. While this remains the primary method of crowdfunding, things are changing in favor of an equitable approach.
Forbes predicted in 2021 that as crowdfunding became less stigmatized, it would experience a massive amount of growth in the coming decade, and as of 2023, this has all but been confirmed.
According to the latest data, the global crowdfunding market is projected to grow from $1.25 billion in 2022 to $1.41 billion in 2023, and then to a further $3.62 billion by 2023. This makes the projected compound annual growth rate for crowdfunding an impressive 14.5%.
The future is bright for crowdfunding as a whole, and that includes Reg CF.
Yahoo Finance reports that the first quarter of 2023 was particularly fruitful for Reg CF, which saw a 60% increase from its low point at the end of 2022.
In February 2023 alone, Reg CF raised a total of $31.8 million globally, nearly doubling the $18.6 million it raised in December 2022.
All signs point to further growth for equity crowdfunding, which could overtake the traditional lending market in the coming years.
In conclusion, Reg CF shows no signs of slowing down.
Conclusion
These are encouraging statistics. They show that equity crowdfunding is here to stay.
The growing industry is taking crowdfunding by storm, going to work for both startups and investors.
With growth rates in the industry showing an unstoppable upward trajectory, there couldn’t be a better time to get involved than right now.
So, are you ready to get started on your own equity crowdfunding campaign?
The best place to start is right here.
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It’s time for equity crowdfunding to serve you!
