As Paul Atkins awaits confirmation as the next Chair of the Securities and Exchange Commission (SEC), his nomination presents an exciting opportunity to bolster investment crowdfunding and empower entrepreneurs and small investors alike. Regulation Crowdfunding (Reg CF), introduced in 2016, has unlocked billions in capital for small businesses while providing individual investors access to a burgeoning asset class. If Atkins is confirmed, he would have the chance to elevate Reg CF to the next level.
Here are four steps the SEC could take under his leadership—without Congressional approval—to strengthen investment crowdfunding:
1. Adjust Offering and Investment Limits for Inflation The $5 million cap on what companies can raise under Reg CF and the limits on what investors can contribute are outdated. Inflation has reduced the real value of these thresholds, constraining growth and opportunity. The SEC can, and should, revise these limits to reflect current economic realities.
“Investment crowdfunding has proven its value by enabling thousands of companies to raise needed capital from their communities,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors. “But outdated caps are holding the industry back. Adjusting for inflation will allow more businesses to thrive and give investors greater flexibility.”
2. Extend COVID-Era Audit Relief for Issuers During the pandemic, the SEC temporarily eased financial statement requirements for offerings of $250,000 or less, allowing issuers to provide certified financial statements instead of CPA-reviewed ones. Extending this relief would reduce compliance costs for small businesses still recovering economically, while maintaining investor protections through mandatory disclosures, legal accountability for certifications, and the low fraud rate historically seen under Reg CF. This targeted approach balances the needs of small businesses and investors, ensuring both access to capital and transparency.
3. Boost Education and Outreach via the SEC’s Office of the Advocate for Small Business Capital Formation Many entrepreneurs are unaware of how Reg CF can help them raise capital, and investors often don’t understand the benefits of diversifying into this emerging asset class. The SEC’s Office of the Advocate for Small Business Capital Formation should prioritize education and outreach to close this knowledge gap. Empowering entrepreneurs and investors with better information will unleash the full potential of crowdfunding.
4. Encourage Compliance with Annual Reporting Requirements Transparency is key to Reg CF’s success. The SEC should send reminders to successful issuers about their annual reporting obligations, along with clear instructions on how to comply or terminate reporting if eligible. Maintaining high compliance rates will ensure that Reg CF remains the most transparent exemption in private capital markets—an achievement that should be the envy of the world.
By taking these four steps, the SEC under Atkins’ potential leadership could build on the strong foundation of Reg CF and foster an environment where entrepreneurs can thrive and investors can benefit. “With small businesses driving economic growth and job creation, it’s imperative to support them with accessible and transparent capital-raising tools,” Neiss emphasizes. “These are commonsense actions that will have an outsized impact.”
Whether or not Atkins ultimately assumes the SEC chairmanship, the ideas outlined here represent practical measures that could—and should—be implemented to improve the crowdfunding ecosystem.
Sherwood Neiss is a Principal at Crowdfund Capital Advisors and a pioneer in the investment crowdfunding industry.
The startup world is undergoing a seismic shift. The way early-stage businesses secure funding is evolving, and a new champion is emerging: Investment Crowdfunding. Here’s why I believe it’s poised to become the primary starting point for all startups—surpassing venture capital and angel investing in the near future.
Venture capital has long been a cornerstone of the startup ecosystem, but the cracks in its foundation are showing. Post-pandemic market corrections, economic uncertainty, and investor caution have caused a pullback in funding. Even when VCs do invest, they’re increasingly targeting later-stage companies, leaving early-stage founders to fend for themselves.
This shift upstream is creating a gap at the most critical stage of startup growth—the early, formative years when ideas are fragile but full of promise. That’s where investment crowdfunding comes in.
Angel Investors: Limited in Scope
Angel investors have traditionally filled the gap left by venture capital, but their reach is inherently limited. They typically invest close to home and within their networks, which can exclude diverse founders and underrepresented industries. Angels play a vital role but lack the scale and democratization needed to drive a paradigm shift in startup funding.
The Crowdfunding Revolution: Retail Investors to the Rescue
Investment crowdfunding, regulated under the JOBS Act, has empowered everyday retail investors to participate in funding startups. Millions of small checks are collectively filling the void left by venture capital and angels. These investments are more than just financial—they’re building communities of investors who are also customers, brand advocates, and early adopters.
This model addresses one of the largest pain points for startups funded by traditional means: turning capital into market traction. With investment crowdfunding, the very act of raising money creates a built-in base of users who are financially and emotionally invested in the product’s success.
The Data: Small Checks, Big Impact
As keepers of all the investment crowdfunding data (via CCLEAR), the numbers speak for themselves. Regulation Crowdfunding campaigns are consistently hitting—and exceeding—early-stage funding goals. In many cases, crowdfunding rounds now rival Series A investments in terms of total capital raised. Platforms like Republic, StartEngine, and Wefunder are leading the charge, hosting campaigns that raise millions of dollars while activating thousands of supporters.
Why This Shift is Good for Startups
This shift is more than a temporary trend; it’s a fundamental evolution in startup funding. Here’s why it’s beneficial:
Diverse Access to Capital: Founders who may not fit the traditional mold for VC or angel funding can tap into the power of the crowd.
Market Validation: Crowdfunding campaigns validate a product’s demand, providing proof of concept before scaling.
Built-In Advocates: Crowdfunded startups create an engaged community of investors who amplify their message and drive growth.
The Series A is Coming to the Crowd
Crowdfunding campaigns are no longer just about scraping together seed funding. With aggregate investments increasingly surpassing $1 million per campaign, retail investors are stepping up to fund amounts traditionally reserved for Series A rounds. As this trend accelerates, startups will no longer need to beg VCs for funding—they’ll find it in their customers’ pockets.
The Timeline: Where Are We Headed?
It’s clear this trend is already underway, but its full impact will take a few more years to unfold. By 2030, I predict investment crowdfunding will be the definitive starting point for most startups. Its scale, efficiency, and ability to drive market traction will outpace traditional methods of funding.
Mark My Words
The rise of investment crowdfunding isn’t just a possibility—it’s an inevitability. The democratization of startup investing is here, and it’s already proving its worth. Millions of small-dollar investors are stepping up, funding innovation, and driving change. The era of the venture capital gatekeeper is waning, and a new champion of entrepreneurship is taking its place. Startups of the future will be built by the crowd, for the crowd.
If you’re not watching this space, you’re already behind.
As the landscape of investment opportunities evolves, investment advisors must broaden their horizons to stay relevant. Regulation Crowdfunding (Reg CF), introduced under the JOBS Act, has created a pathway for everyday investors to support small businesses and startups through equity and debt investments. While the structure of these investments may not directly benefit advisors through traditional commissions, embracing investment crowdfunding offers strategic advantages that align with modern advisory practices.
A Holistic Approach to Wealth Management
Advisors are increasingly expected to take a comprehensive view of their clients’ financial portfolios. Clients today, particularly millennials and Gen Z investors, are motivated by values-driven investing, community support, and high-growth potential opportunities. Crowdfunding fits this ethos, offering access to pre-IPO opportunities and local investment projects. By advising clients on these investments, advisors demonstrate an awareness of contemporary trends and an ability to guide clients beyond traditional assets like stocks and bonds.
The Rise of the DIY Investor and the Need for Guidance
Platforms like Republic, Wefunder, and StartEngine have democratized investment access. However, navigating the landscape of private investments remains complex due to risks such as limited liquidity, disclosure variability, and fraud. This is where advisors can step in—not just to recommend or discourage, but to educate. By offering insights into Reg CF campaigns and performing due diligence, advisors can protect their clients from undue risk while reinforcing their own value proposition.
Differentiating the Advisory Practice
Investment advisors who incorporate crowdfunding insights into their services can position themselves as forward-thinking and client-centric. They can:
Analyze the potential risks and returns of crowdfunding campaigns.
Help clients identify opportunities aligned with their financial goals and risk tolerance.
Offer a value-added service that differentiates them from competitors who stick to conventional portfolios.
Moreover, research shows that startups using crowdfunding often contribute significantly to local economies and job creation. Advising on these investments allows advisors to champion community impact—a growing priority for many investors.
Regulatory Confidence and Fiduciary Duty
Reg CF is highly regulated by the SEC and FINRA, ensuring greater transparency and investor protection compared to earlier forms of crowdfunding. Advisors should leverage this regulatory structure to reassure clients that these investments are legitimate, albeit high-risk. This is consistent with a fiduciary duty to act in clients’ best interests while exploring new financial opportunities.
Conclusion: Adding Value Without Chasing Commissions
Investment crowdfunding may not fit the commission-based model, but its importance in the modern financial ecosystem cannot be ignored. Advisors who embrace this trend stand to enrich their client relationships, enhance their reputation, and ensure their practices remain relevant in a rapidly evolving investment landscape.
By recognizing crowdfunding’s potential and educating clients about it, investment advisors position themselves as indispensable partners in wealth creation and management. If you’d like to explore how crowdfunding data can integrate into your practice, visit CClear.ai or sign up for their newsletter for insights into the latest trends.
The crowdfunding industry, long championed as a democratized approach to funding startups and small businesses, has navigated a complex journey since its 2016 debut. As the numbers reveal, while total commitments remain robust, the underlying dynamics tell a more nuanced story of shifting capital flows, retail pullbacks, and the rise of parallel investments.
What began as an experimental financing avenue in 2016 has matured into a significant funding channel, with commitments growing from $19.7 million in its inaugural year to a staggering $554 million at its 2021 peak. The early years were fueled by retail investors eager to participate in Regulation Crowdfunding (Reg CF) opportunities, buoyed by the promise of investing in the next big idea.
By 2020, amid the economic turbulence of the COVID-19 pandemic, total commitments surged to $246.8 million, doubling from the prior year as businesses turned to crowdfunding for critical capital. That same year, a new trend emerged: the introduction of parallel investments—funds raised from accredited investors through private 506(c) deals but offered at the same terms as Reg CF campaigns. While these parallel deals initially accounted for a modest $255,000 in 2020, their role has grown exponentially, shaping the industry’s trajectory.
2022–2024: A Nuanced Narrative
The period following the 2021 high-water mark reflects the challenges facing crowdfunding. Retail investors, the backbone of the industry, began pulling back amid inflation concerns, venture capital hesitancy, and broader market uncertainty. Retail commitments fell from $554 million in 2021 to $473.5 million in 2022 and further to $343.4 million in 2024.
However, this pullback has been counterbalanced by a striking rise in parallel investments. In 2023, these accredited investor contributions reached $95.4 million, nearly four times the $24.7 million recorded in 2022. By 2024, parallel commitments had ballooned to $163.7 million, comprising a substantial portion of total funding.
While the 2024 numbers, bolstered by an estimated $58.7 million in December commitments, appear strong at $565.7 million, the reality is more layered. Retail participation has dwindled, and the growth seen in recent years has largely been sustained by parallel investments—a shift that has kept the industry afloat but highlights a critical dependency.
The Path to 2025: Challenges and Opportunities
Looking ahead, the industry faces a pivotal moment. The new administration, with its pro-business stance, is expected to create favorable conditions for private capital markets, potentially reigniting retail investor enthusiasm. Crowdfunding platforms are also anticipated to expand their reach into high-growth sectors like healthcare, food services, and FinTech, capitalizing on investor demand for both transformative technologies and a good empanada.
“Crowdfunding is more resilient than ever, but the key to long-term growth lies in re-engaging retail investors,” said Sherwood Neiss, Principal at Crowdfund Capital Advisors. “The reliance on parallel investments has been a lifesaver, but it’s not sustainable to depend so heavily on accredited investor contributions.”
CCLEAR, a division of CCA that focuses on investment crowdfunding data, projects that 2025 could see total commitments surpass $750 million, with a balanced mix of retail and parallel investments driving the growth. This rebound, if realized, would mark a return to form for the industry while underscoring its adaptability in the face of shifting economic conditions.
An Industry’s Evolution
As the industry gears up for 2025, its inclusivity remains a bright spot. In 2024, 40% of offerings were led by women or minority founders, a testament to crowdfunding’s potential to democratize access not just for investors but for entrepreneurs. This diversity, coupled with a maturing ecosystem, positions crowdfunding as a cornerstone of the private capital landscape.
The numbers tell a story of resilience and evolution. The question now is whether the industry can reignite the retail enthusiasm that once defined it while maintaining the momentum parallel investments have provided. For crowdfunding, the future is as nuanced as its past—and just as promising.
For decades, venture capital has been the undisputed kingmaker of startups, a world where a select few held the power to determine which companies thrived and which withered. But a quiet revolution is underway. Investment crowdfunding, once dismissed as a niche funding mechanism, is reshaping the startup ecosystem and redefining how investors evaluate opportunities.
Underpinned by Regulation Crowdfunding (Reg CF) introduced in the JOBS Act of 2012, platforms like Wefunder, StartEngine, Honeycomb, and Republic have emerged as key players in this new wave of financing. These platforms enable startups to raise funds from everyday investors, democratizing access to capital in ways that were previously unimaginable. Crowdfunding deals now span nearly 2,000 cities across the United States, with more than 100 platforms offering opportunities to invest.
Critics argue that crowdfunding lacks the rigor of traditional venture capital. They point to the deep diligence VCs perform before committing millions to a startup and the strategic guidance they often provide. But proponents of crowdfunding counter with a compelling argument: investor sentiment within Reg CF campaigns is becoming a leading indicator of a startup’s potential. Deals with hundreds of investors and larger-than-average check sizes suggest a combination of market validation and deep trust in the founding team—data points that even the most seasoned VC would find hard to ignore.
Some of the biggest names in venture capital are paying attention. Andreessen Horowitz, a household name in Silicon Valley, has participated in crowdfunding deals like Levels Heath despite having ample resources to fund its portfolio companies outright. The reason? Crowdfunding offers a unique advantage: direct engagement with a startup’s potential customer base. For companies already backed by institutional capital, crowdfunding provides something VCs alone can’t—marketing buzz and a built-in community of brand advocates.
Take, for example, take the 60 startups that have raised $5 million or more in a Reg CF campaign. These deals often attract more than 2,500 investors, many of whom are future customers. Their financial commitment signals strong confidence in the team and product, creating a form of validation that resonates beyond balance sheets. For VCs, this investor enthusiasm can serve as a powerful indicator, surfacing opportunities that might otherwise go unnoticed.
Another feature of crowdfunding that sets it apart is its geographic reach. Traditional VC has long been concentrated in hubs like Silicon Valley and New York. But crowdfunding platforms are changing the game, channeling capital into underserved markets, including rural America where nearly 500 startups have leveraged Reg CF. Startups in these areas now have access to funding that previously would have been out of reach, helping to unlock innovation in overlooked corners of the country.
Crowdfunding is also leading the charge in diversifying entrepreneurship. In 2023, nearly 40% of crowdfunding campaigns included at least one woman or minority founder—an achievement far beyond the 2% representation these groups typically receive in venture capital. For many founders, crowdfunding has become not just a financing tool but a lifeline, enabling them to grow their businesses on their terms.
Despite its promise, crowdfunding is not without risks. Herd mentality can influence campaigns, and platforms must ensure transparency to protect both founders and investors. Still, the data flowing from crowdfunding platforms offers a treasure trove of insights. For venture capitalists, it represents a new frontier for diligence, allowing them to identify trends, validate markets, and de-risk their investments by backing companies already tested by the crowd.
The relationship between crowdfunding and venture capital is evolving. Far from being rivals, the two are proving to be complementary forces. Crowdfunding helps early-stage startups gain traction, while venture capital provides the scaling power necessary to dominate markets. Together, they are redefining what’s possible for startups and investors alike.
The question is no longer whether crowdfunding will disrupt venture capital. It’s how quickly the two will learn to work together. For now, the startups stand to benefit most, with more funding options, greater market validation, and unprecedented access to capital—no matter where they are or who they are.
If you are interested in the data behind this story, reach out to: data@theccagroup.com
When Regulation Crowdfunding (Reg CF) was introduced in 2016, it created a new path for businesses to raise capital, connecting entrepreneurs with a broader pool of investors. Initially dominated by early-stage, pre-revenue startups, the industry has matured significantly over the past eight years. A closer look at the data reveals a striking trend: post-revenue issuers—both startups and established companies—have steadily grown their share of the market, culminating in 2024, where their combined total is at an all-time high.
The Data Tells a Story of Growth
The numbers show a profound shift in the composition of crowdfunding campaigns. In 2016, post-revenue issuers (startups and established) accounted for a combined 37.2% of all offerings. By 2024, that figure had climbed to an unprecedented 63.1%, representing a nearly 70% increase over eight years.
For established post-revenue issuers, the growth has been especially remarkable, doubling from 20.2% in 2016 to 45.2% in 2024. Post-revenue startups, while less dominant, have maintained a consistent presence, peaking at 25.5% in 2017 before settling at 17.9% in 2024. Together, these groups now form the majority of offerings, marking a dramatic pivot from the industry’s earlier reliance on pre-revenue startups.
Meanwhile, pre-revenue startups—the early pioneers of crowdfunding—have seen their share dwindle from 56.4% in 2016 to 27.4% in 2024. This reflects both the diversification of the crowdfunding ecosystem and the increasing competition for investor attention.
Why the Shift?
Several forces have driven this transformation:
Crowdfunding Matures into a Serious Capital Source: The increase in the funding cap from $1 million to $5 million in 2020 allowed more established businesses to participate. These companies bring operational track records and revenue streams, making them more attractive to investors seeking reduced risk.
Economic Conditions and Market Dynamics: A tightening venture capital market has pushed businesses to explore alternative funding sources. Crowdfunding, with its community-focused approach and flexible structures, has provided a lifeline for post-revenue businesses seeking growth capital or bridge financing.
Savvier Investors: Crowdfunding investors are no longer the speculative pioneers of 2016. They’ve grown more sophisticated, favoring campaigns from businesses with clear revenue models and paths to profitability. This has naturally shifted demand toward post-revenue issuers.
Platform Innovation: Crowdfunding platforms have adapted to accommodate larger, more complex issuers. Enhanced tools, better marketing strategies, and improved investor relations services have made it easier for post-revenue companies to engage successfully with the crowd.
The Implications of This Growth
The rise of post-revenue issuers has significant ramifications for investors, issuers, and the crowdfunding ecosystem at large:
Lower Risk, Broader Appeal: Post-revenue businesses, particularly established ones, often present less risk to investors. This shift toward more stable issuers broadens the appeal of crowdfunding to a wider audience, including more conservative investors.
A New Pathway for VCs: As venture capital markets ease, crowdfunding can act as a proving ground. Investors can observe which post-revenue issuers survive economic headwinds, providing VCs with vetted opportunities.
The $20 Million Question: The current $5 million funding cap may soon become a bottleneck for larger issuers entering the space. Raising this cap to $20 million would open the door for even more mature companies to leverage crowdfunding for substantial growth initiatives.
A Balanced Ecosystem: The industry’s evolution doesn’t mean the end for startups. Pre-revenue issuers still play an essential role in the ecosystem, providing innovation and high-risk, high-reward opportunities for investors. However, they must now compete in a more diverse, mature marketplace.
Looking Forward
The growth of post-revenue issuers—startups and established businesses alike—signals that crowdfunding is entering a new phase of maturity. In 2024, the combined dominance of these issuers highlights the platform’s potential as a mainstream funding mechanism. For investors, this means access to less risky opportunities with proven track records. For issuers, it demonstrates that crowdfunding can compete with traditional financing at every stage of business development.
But this growth also underscores the need for policy updates. With the industry attracting larger players, raising the funding cap to $20 million would unlock its full potential, enabling crowdfunding to serve as a vital tool for scaling businesses.
As we move into the next decade, it’s clear that crowdfunding is no longer just a stepping stone for startups—it’s a foundation for business growth and innovation across all stages.
Interested in the data behind this story? Reach out to data@theccagroup.com with your inquiry!
With Donald Trump’s anticipated return to the White House, there’s growing curiosity in the investment crowdfunding space. Industry stakeholders are wondering: what could another Trump administration mean for startups, small businesses, and the alternative investment landscape? As a data-driven entity, our team at Crowdfund Capital Advisors and CCLEAR has tracked every offering and daily transaction in the investment crowdfunding space since its inception in 2016. Leveraging this data, we can make informed projections on what this administration might bring to the industry—and the future looks promising.
Learning from History: The Impact of Trump’s First Term on Investment Crowdfunding
The investment crowdfunding industry saw substantial growth during Trump’s previous term, with policies favoring deregulation and reduced corporate taxes creating a positive environment for alternative funding. These policies allowed startups and small businesses to access capital more easily. From 2016 to 2020, the percentage of successful campaigns grew from 49% to over 70%, while the average amount raised per successful campaign nearly doubled, from $185,639 in 2016 to $292,755 by 2020. Investor participation also surged, with investor checks increasing from 21,750 in 2016 to 360,702 by 2020, demonstrating a marked rise in retail investor interest.
While it’s true that investment crowdfunding has grown as part of broader trends in alternative investments, data shows that it grew disproportionately during years with favorable policy shifts, including during Trump’s administration. For example, from 2019 to 2020, the industry saw a jump in total funds raised from $133 million to $247 million, correlating with Trump’s tax policies and deregulation efforts. In comparison, traditional VC investments saw a less steep growth trajectory in these years. This suggests that while economic factors contributed to growth, specific Trump-era policies also played a significant role. We wouldn’t be surprised to see total Regulation Crowdfunding investments jump from an estimated $563 million in 2024 to nearly $750 million in 2025 under similar circumstances.
Projecting a Positive Narrative for Startups and Small Businesses
Investment crowdfunding is uniquely positioned to thrive under an administration focused on stimulating small businesses. Trump has frequently spoken about his intention to reduce regulatory burdens and enhance tax incentives for U.S.-based companies—especially startups and small businesses, which are the backbone of the American economy.
If these pro-business policies are enacted, we anticipate a ripple effect throughout the investment crowdfunding space. When startups have fewer regulatory barriers and better tax incentives, they’re more likely to seek funding and find success on online investment platforms. We’ve already seen this correlation: in years with favorable policies, investment volumes, campaign activity, and investor participation have all increased. For example, in 2021, the number of retail investors participating in crowdfunding reached an all-time high of 529,000, reflecting heightened enthusiasm and accessibility for retail investors.
However, in recent years, investor participation has slowed, as economic uncertainties and regulatory challenges created a more cautious environment. We expect that a Trump administration, with its focus on deregulation and pro-business policies, would help bring back more retail investors, rejuvenating the investment crowdfunding space. Renewed retail participation would provide startups and small businesses with the grassroots support they need to grow, while giving everyday investors the chance to participate in entrepreneurial ventures that align with their values and financial goals.
VC Resurgence and the Path to M&A and Follow-on Investment
Another encouraging factor is the likelihood of increased VC (venture capital) activity. After years of economic uncertainty, VC investor participation, according to PitchBook, peaked at 25,133 in 2021, but it has since declined to 11,425 as of Q3 2024. A pro-business administration could help revive VC interest, creating a more dynamic funding ecosystem where investment crowdfunding serves as a crucial bridge for startups seeking initial capital before moving on to larger VC rounds.
A recovering VC market would create more opportunities for Reg CF-backed companies to secure follow-on investments or achieve exits through mergers and acquisitions. Our data shows that with more VC involvement, crowdfunded companies have a higher likelihood of securing these follow-on investments, which can accelerate their growth. This “ladder effect” in funding helps startups scale, benefiting both the early retail investors who participate in crowdfunding and the VC investors who enter later.
While we acknowledge that external economic factors will continue to affect VC activity, historical trends suggest that pro-business policies—such as those seen during Trump’s first term—do encourage a more robust investment environment. A return of VC participation could renew the flow of capital, leading to further scaling opportunities for crowdfunded companies.
The SEC Chair’s Departure: A Breath of Fresh Air for the Industry
The anticipated departure of SEC Chair Gary Gensler marks another positive development for the industry. Gensler’s tenure saw heightened scrutiny of alternative investments, which many in the industry viewed as restrictive for startups and small businesses relying on investment crowdfunding. A shift in leadership could mean reforms that align with the industry’s growth needs, including streamlined regulations and expanded opportunities for issuers.
Three critical areas for reform under the new administration and SEC leadership are as follows:
Increasing the Reg CF Cap: Raising the maximum amount issuers can raise under Reg CF from the current $5 million cap to $20 million. This increase would allow more companies to secure substantial funds and scale. This would fill the void that Tier 1 of Regulation Crowdfunding left for issuers seeking to raise up to $20 million through a qualified offering.
Tax Incentives: Adding tax incentives and credits for investment crowdfunding to the next iteration of the Tax Cuts and Jobs Act (TCJA) could provide same-year deductions on a percentage of an investor’s contribution and remove capital gains taxes on these investments. These measures would attract more investors without removing any investor protections.
Establishing a $2 Billion Co-Investment Fund: This fund would allow the government to co-invest alongside retail investors, bolstering the economic impact of crowdfunding while mitigating risk for individual investors.
These reforms would not only support entrepreneurship and job creation but would also have a measurable economic impact. According to our data at CCLEAR, every dollar invested in startups through crowdfunding translates to $5.70 in economic output through corporate expenditures. Given the total funding raised in recent years—$526 million in 2023 alone—raising the cap could see even more capital deployed into job-creating companies.
Investment Crowdfunding as a Tool for Revitalizing U.S. Manufacturing
Investment crowdfunding has a unique role to play in Trump’s vision for reviving U.S. manufacturing. Many of the companies raising funds through crowdfunding platforms are local manufacturers, producers, and innovators looking to grow on U.S. soil. By supporting these companies, investment crowdfunding can help rebuild domestic manufacturing, a priority Trump has often emphasized.
Not only does this keep jobs in America, but it also supports supply chain resilience and strengthens local economies. For example, several recent crowdfunding campaigns have successfully funded small manufacturing businesses in states like Michigan and Ohio, contributing to Trump’s stated goal of a manufacturing resurgence. If the administration recognizes the value of investment crowdfunding in building U.S. manufacturing, it could incentivize locally focused projects on these platforms. This would be a win for both the industry and Trump’s broader economic agenda, creating a symbiotic relationship where small businesses, local communities, and the American economy all stand to benefit.
A Vision for the Future: More Jobs, More Growth, and More Opportunity
In summary, a second Trump administration holds great promise for the investment crowdfunding industry. With the right combination of policy shifts—such as increased funding caps, reduced regulatory burdens, and tax incentives for startups—investment crowdfunding could continue its upward trajectory, supporting job creation and local economic growth nationwide. As venture capital activity picks up and SEC reform allows for more expansive crowdfunding opportunities, the industry is well-positioned to become a cornerstone of America’s small business and manufacturing revitalization.
By backing this narrative with the data we’ve gathered at CCLEAR, we can confidently say that the incoming administration has an opportunity to amplify the positive impact of investment crowdfunding. If leveraged correctly, this sector can become a powerful tool for U.S. economic growth and innovation, driving meaningful change for startups, small businesses, and the investors who believe in them.
The life sciences sector—spanning healthcare, biotechnology, and medical research—has become one of the most dynamic areas in investment crowdfunding. Companies are not only turning to crowdfunding to raise capital but are also building engaged communities of supporters who become advocates and brand ambassadors. As healthcare innovation becomes increasingly capital-intensive, crowdfunding offers an alternative path to growth, allowing life sciences firms to achieve critical milestones and attract investor attention in a meaningful way.
“Healthcare is one of the most popular industries within investment crowdfunding,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors. “These issuers are turning to their followers not just for capital, but also for marketing and brand awareness. This approach helps them grow a community of advocates, making it easier to hit funding goals, generate visibility, and attract future venture capital.”
More than 840 Life sciences issuers have raised over $300 million, indicating a strong appetite from investors who are increasingly drawn to high-impact projects in health and biotechnology. The average raise reached $486,000, reflecting a trend toward higher-value campaigns as investors focus on companies with tangible growth potential.
The Crowdfunding Advantage for Pre-VC Life Sciences Companies
For many healthcare companies, crowdfunding serves as a pre-VC stage, helping them prove their concepts, attract early supporters, and generate data on market demand. By the time these companies reach venture capital, they have a track record, a clear set of goals, and demonstrated investor interest—key factors in securing additional funding. This trend reflects a shift in how early-stage companies approach fundraising, using crowdfunding as a springboard to reach more established funding avenues.
Exploring the Data and Trends Behind Life Sciences Crowdfunding
Our latest Life Sciences Investment Crowdfunding Report offers a comprehensive look at sector performance, valuation trends, and investor behavior. For industry professionals, investors, and entrepreneurs, it provides invaluable insights into one of the fastest-growing segments of the crowdfunding landscape. This report is also part of our larger effort to track emerging trends in investment crowdfunding, helping stakeholders understand where the market is headed. (Also available, for a limited time, is a list of all Life Science issuers within Investment Crowdfunding since the industry launched).
As life sciences companies continue to redefine how they grow and raise funds, this report underscores the sector’s potential to drive both economic impact and transformative health innovation. Whether you’re directly involved in the industry or simply curious about new funding models, life sciences crowdfunding is worth a closer look.
Crowdfund Capital Advisors (CCLEAR) reports that investment crowdfunding deal values rose in October 2024, signaling renewed activity in the sector despite a complex economic backdrop. While one month’s data does not define a trend, October’s results reflect positive momentum for companies leveraging crowdfunding to fuel innovation and growth.
Although deal values increased, the number of new crowdfunding deals saw a slight decline, with 112 deals in October, down from 129 in September and 115 in October 2023. The industry saw $55.3 million in commitments, marking the third-highest month for deal values this year. Equity offerings continued to dominate as investors showed a strong preference for established, post-revenue companies over debt offerings, which captured only 5.7% of total capital raised.
Year-to-date, 49 crowdfunding platforms or broker-dealers have facilitated investment rounds, though platform participation has decreased compared to last year. The food service, healthcare, biotechnology, life sciences, and beverages sectors were among the most active, with key players like StartEngine and Wefunder securing substantial deal flow and capital. A robust crowdfunding market provides crucial support to small and emerging businesses, fueling innovation, job creation, and economic prosperity in an uncertain economic climate.
“With the outcome of the November election, we expect the investment crowdfunding market to see substantial gains,” said Sherwood Neiss, principal at Crowdfund Capital Advisors. “This would be a positive boost for the economy, as every dollar invested in a successful crowdfunding company equates to $5.70 of economic stimulus, according to CCLEAR data.”
This trend illustrates the growing role of crowdfunding in channeling capital to a segment of the private markets where venture activity has slowed, but businesses are ready to drive significant economic impact.
In recent years, investment crowdfunding has become essential for democratizing access to capital, allowing small businesses and startups to realize sustainable growth. For consulting firms focused on innovation, economic policy, and small business development, investment crowdfunding represents a pivotal strategy for fostering local economic resilience and fueling entrepreneurship.
Management consulting firms play a crucial role in driving transformative strategies that enable startups to thrive, foster innovation, and create new jobs. While traditional funding avenues remain vital, investment crowdfunding offers an alternative pathway for entrepreneurs, connecting them directly with investors who believe in their vision. This channel empowers companies, particularly those in underserved markets, to gain visibility and access to capital on a scale previously out of reach.
The Strategic Role of Regulation Crowdfunding
The Jumpstart Our Business Startups (JOBS) Act and the subsequent Regulation Crowdfunding (Reg CF) rules have opened doors for smaller investors to support early-stage companies in exchange for equity. Crowdfund Capital Advisors’ research shows substantial growth in crowdfunding-backed companies across regions and industries. Consulting firms like Bain & Company, IBM (IBM Garage), Deloitte (Deloitte Catalyst), Accenture (Accenture Ventures), and EY-Parthenon can align their services with this trend, advising clients on leveraging crowdfunding as an innovative source of capital to build stronger, more resilient businesses.
Investment Crowdfunding: Empowering Economies at the Local Level
Investment crowdfunding levels the playing field for businesses in smaller cities and diverse communities by facilitating capital inflows that would otherwise be inaccessible. For consulting firms, guiding clients through crowdfunding helps achieve broader economic resilience goals. For instance, Bain & Company’s Bain Innovation Exchange (BIE) provides startups with the tools and networks to scale effectively. Through initiatives like the “Innovation Kickstarter,” Bain supports business model development tailored specifically to startup needs.
Similarly, IBM Garage collaborates with businesses to identify operational pain points and rapidly develop and launch solutions, making it an ideal partner for tech-oriented startups needing streamlined digital infrastructure and robust security measures. These services empower startups to transform their business models using IBM’s deep technology expertise in AI, automation, and supply chain management.
Why Consulting Firms Should Embrace Crowdfunding for Clients
As a tool for economic revitalization, investment crowdfunding offers firms like Deloitte Catalyst and Accenture Ventures unique opportunities to support small businesses and drive sustainable growth. Deloitte Catalyst provides startups with end-to-end services across the entrepreneurial lifecycle, connecting them to a vast network and expediting market entry. Accenture Ventures, with its Project Spotlight, helps startups accelerate their growth by integrating them into larger enterprise ecosystems, providing tools and resources essential for navigating complex market landscapes.
Additionally, EY-Parthenon is renowned for its strategic consulting expertise, assisting startups in technology, healthcare, and financial services with tailored growth plans and scaling strategies. EY-Parthenon’s global network and vast resources make it an attractive option for fast-growing companies aiming to expand quickly and efficiently.
A Future-Focused Approach to Investment
Investment crowdfunding is a valuable tool that complements consulting firms’ broader goals of economic empowerment and job creation. By supporting startups in navigating crowdfunding campaigns, consulting firms can help these businesses thrive in today’s competitive landscape. Firms like Bain & Company, IBM, Deloitte, Accenture, and EY are well-positioned to adopt crowdfunding as a strategic growth lever, driving long-term economic resilience and innovation.
We invite consulting leaders to explore the opportunities investment crowdfunding provides, especially for startups and small businesses that prioritize community-centered growth. Crowdfund Capital Advisors remains dedicated to providing the insights and data needed to make crowdfunding a powerful resource for clients nationwide. For more information on how investment crowdfunding can enhance client growth strategies, visit us at www.CrowdfundCapitalAdvisors.com.
In a rapidly shifting economic landscape, the time has never been better for businesses to leverage Regulation Crowdfunding (Reg CF) to secure funding and build loyal investor communities. Several recent developments underscore this unique opportunity for potential Reg CF issuers to stand out in the market and raise capital effectively.
1. Private Markets Have Bottomed Out
With the private markets hitting recent lows, investors are eager to seize opportunities to support resilient and high-potential businesses. As many in the private market look to rebuild their portfolios with promising assets, Reg CF issuers stand to benefit from this increased interest. In these conditions, Reg CF becomes an attractive entry point for investors looking for value and growth in the recovery cycle.
A lower interest rate environment, fostered by recent Federal Reserve cuts, translates to more accessible capital and reduced borrowing costs for businesses. This also means investors have fewer options for strong returns in traditional investments like bonds, which could encourage them to diversify into alternative assets like equity crowdfunding. With reduced returns elsewhere, community-backed ventures via Reg CF can appear especially attractive.
According to insights from leading financial institutions like Goldman Sachs, the economy’s soft landing has mitigated fears of a severe recession. This stability brings more confidence to investors, who may now be more willing to participate in new ventures without as much risk aversion. The renewed investor confidence presents a favorable environment for businesses seeking to raise capital through Reg CF.
4. VC Trends Create a Unique Opportunity for Reg CF Issuers
The recent trend of venture capital (VC) firms shifting upstream toward later-stage investments has left a noticeable void in the early-stage investment landscape. This gap creates a unique opportunity for Reg CF issuers to engage with local communities and raise essential seed capital. For entrepreneurs and small business owners, Reg CF provides a platform to attract investors who believe in their mission and are eager to see them succeed.
Moreover, as the private market cycle progresses, Reg CF issuers have a chance to use this funding period as a bridge to more significant investments down the line. Companies can build their traction now with community investors, positioning themselves strategically for when VC firms return to earlier-stage investments.
5. Reg CF Continues to Thrive Despite Market Volatility
Unlike traditional capital markets, Reg CF has demonstrated remarkable resilience throughout recent market fluctuations. Capital commitments in Reg CF have remained strong, nearly matching the record numbers seen in 2021. The 2023 Year in Review indicates that interest in Reg CF offerings has not waned, and the volume of active deals, despite slight contractions, continues to reflect a robust investment climate.
“For potential Reg CF issuers, this convergence of economic stability, supportive monetary policy, and favorable market dynamics creates a prime moment to launch a crowdfunding campaign,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors. “With a community-driven financing model, issuers can not only raise funds but also foster a loyal base of advocates and potential customers. Now is the time to harness this moment—align with investors eager to participate in your growth journey and take advantage of Reg CF’s community-powered potential.”
For continued insights on market trends and investment crowdfunding strategies, subscribe to the CCA newsletter for direct updates.
As the latest PitchBook-NVCA Venture Monitor highlights, the venture market may have bottomed out, but it hasn’t yet shown signs of a strong recovery. Venture capital (VC) firms are proceeding with caution, many leaving the market altogether or tightening the terms of investment to reduce risk. In this environment, startups backed by VCs should consider investment crowdfunding as a viable bridge financing option, providing the capital they need to sustain and grow while sidestepping the slower, more restrictive VC process.
Let’s dive into why investment crowdfunding is particularly well-suited to meet this need and why it’s worth considering in today’s venture landscape.
What is Investment Crowdfunding?
Investment crowdfunding, enabled by the JOBS Act of 2012, allows companies to raise capital from a large number of investors via online platforms. Unlike traditional VC, which often limits investment to accredited investors (those meeting specific income or net worth criteria), Regulation Crowdfunding (Reg CF) opens the door for anyone to invest, empowering communities, customers, and other non-traditional investors to support companies they believe in.
Through SEC-regulated portals like Wefunder, StartEngine, and Republic, companies can launch campaigns to attract investors by offering equity or other forms of securities. Investment crowdfunding campaigns run under clear regulations to protect both issuers and investors and have proven successful in helping early-stage companies meet funding goals quickly and effectively.
Why Consider Investment Crowdfunding as a Bridge Financing Tool?
In today’s capital market, Reg CF offers distinct advantages, especially for companies that already have some VC backing but need capital quickly. Here’s why it’s particularly effective now:
1. Contextualizing the Venture Capital Slowdown
The venture market remains in a cautious state. While on pace to exceed $175 billion in investments this year, liquidity challenges have limited a more substantial recovery, causing many VC firms to reevaluate their strategies. This slowdown has driven some VCs to enforce more stringent protections in term sheets, while others have left the market altogether. For VC-backed startups, this climate presents challenges in securing follow-on funding, meaning additional financing alternatives are essential for continued growth.
2. Investment Crowdfunding as an Efficient Bridge
Crowdfunding offers a quicker alternative to traditional VC rounds, which can often take upwards of nine months to finalize. With Reg CF, the average campaign length is around 195 days—significantly shorter and more manageable for companies needing bridge financing without lengthy delays. This timeline efficiency makes crowdfunding particularly attractive, allowing companies to secure capital on a shorter schedule and remain agile in their growth trajectory.
3. Data on Series A Companies Using Crowdfunding
Series A-backed companies have shown that they can successfully raise additional capital through investment crowdfunding, with average raises hovering around $1 million. This trend underscores that crowdfunding can be a powerful tool for companies that have already attracted VC support, providing a reliable supplement to previous funding rounds without extensive terms renegotiation or delays.
4. Flexibility and Broad Investor Access
Unlike VC rounds, which often limit participation to accredited investors, Reg CF campaigns can draw from a much wider base, including non-accredited investors. This inclusivity allows companies to engage directly with their customer base and communities, generating not only financial support but also fostering loyalty and advocacy. The broader investor pool means companies can raise funds from individuals who are also potential customers, providing a dual benefit of financial capital and brand visibility.
5. Building a Community of Advocates
Crowdfunding campaigns offer more than just financing—they build a community. Investors in a Reg CF campaign tend to feel a sense of ownership and are more likely to promote the business, refer others, and support product launches. This level of customer engagement is invaluable, as it creates a loyal network that may provide continued support and advocacy well beyond the initial funding campaign.
6. Reduced Pressure on Terms and Investor Control
In contrast to the tightened control and rigorous due diligence that VCs are implementing in today’s market, crowdfunding offers a more flexible path with typically less restrictive terms. This provides startups with a greater degree of control over the funding process and the freedom to focus on their business rather than intensive renegotiations or compliance with stringent conditions.
How Investment Crowdfunding Works: A Step-by-Step Guide
For companies new to investment crowdfunding, here’s how a typical campaign works:
Campaign Setup: Start by selecting a platform (like Republic, StartEngine, or Wefunder) and creating a campaign page. This will include business details, the funding goal, financials, and the offering type (equity, convertible notes, etc.).
Compliance and Disclosures: Reg CF requires that companies meet certain SEC disclosure standards. This ensures transparency for investors and helps foster trust. Common disclosures include financial statements, business risks, and goals for the capital raised.
Promotion and Community Engagement: Successful campaigns leverage social media, customer networks, and email marketing to attract interest and build a community of supporters. Engaging directly with customers and potential investors throughout the campaign is key to success.
Funding Goal and Timeline: Crowdfunding campaigns typically have set minimum and maximum funding goals and operate on an “all-or-nothing” model. This means the company only receives the funds if it meets the minimum target by the campaign’s end.
Capital Disbursement and Post-Campaign Engagement: Once the goal is met, funds are disbursed to the company (minus platform fees), and the startup can begin deploying the capital as outlined in the campaign. Keeping investors informed and engaged post-campaign strengthens relationships and promotes long-term support.
Ready to Consider Investment Crowdfunding? Let’s Talk!
For venture-backed companies navigating today’s venture landscape, investment crowdfunding offers an accessible, flexible, and community-driven financing alternative. Whether you’re seeking bridge financing to extend your runway or aiming to expand customer engagement, Reg CF can help you meet those goals.
Contact us (sales@theccagroup.com) today to discuss how investment crowdfunding could be the right fit for your company. Our team has the expertise to guide you through every step of the process, from campaign setup to post-campaign engagement, ensuring you leverage crowdfunding to its fullest potential. Let’s explore how you can use the power of the crowd to sustain and grow your business!
for capital, but also for marketing and brand awareness. This approach helps them grow a community of advocates, making it easier to hit funding goals, generate visibility, and attract future venture capital.”
