CCLEAR, Inc. Launches CapitalPulse Ratings for Enhanced Analysis of Regulation Crowdfunding Investments

For Immediate Release

CCLEAR, Inc. Launches CapitalPulse Ratings for Enhanced Analysis of Regulation Crowdfunding Investments

Denver, CO – January 4, 2023: CCLEAR, Inc., a subsidiary of Crowdfund Capital Advisors, LLC (CCA), is excited to announce the launch of CapitalPulse RatingsTM, a pioneering rating system designed for private companies engaged in Regulation Crowdfunding. This innovative system represents a significant step forward in the analysis of crowdfunding investments, offering dynamic, data-driven insights.

Under the stewardship of CCA – the team behind the framework of Regulation Crowdfunding – CCLEAR, Inc. stands at the forefront of crowdfunding data analysis. CCA’s contributions to the industry are substantial, including their role in the legislative process of Regulation Crowdfunding, the creation of a comprehensive dataset of all crowdfunding offerings, the CCLEAR CrowdFinance 50TM, an index that tracks the overall health and trends of the Regulation Crowdfunding market, and authorship of the ‘Dummies Guide to Investment Crowdfunding.’

CapitalPulse Ratings: Merging Traditional Analysis with Investor Sentiment
CapitalPulse Ratings offers an intricate look at the investment landscape, merging traditional venture analysis—such as company performance and industry benchmarks—with groundbreaking insight into investor sentiment. Sherwood Neiss, Principal at Crowdfund Capital Advisors, states,”CapitalPulse Ratings consider the tried-and-true metrics that angels and venture capitalists rely on, then enhance this with real-time data on how much and how quickly investors are backing these companies. This dual approach gives a 360-degree view of a company’s true investment potential.”

The CapitalPulse algorithm reviews investment crowdfunding offerings and rates them from good to bad based on when a business was incorporated, where it is located, if it has sales, how fair its valuation is compared to others in its industry, how much capital has been invested, how many investors in the round, and other factors like cash, accounts receivables, short-term debt, long-term debt, and income. Each company is scored and ranked into categories.

CapitalPulse Ratings categorizes companies into five distinct tiers, each reflecting the company’s potential and current market position:

• Rapid Raiser: Companies with swift capital inflow, showing strong investor confidence.
• Steady Climber: Companies demonstrating consistent growth in investor interest.
• Emerging Contender: Companies with unfulfilled potential but showing promise.
• Potential Unlocker: Companies with latent potential yet to be realized.
• Emerging Opportunity: Companies whose value may not be immediately evident from current data.

Updated weekly, CapitalPulse Ratings ensures that subscribers receive the most current and relevant insights. Each category is crafted to provide a comprehensive understanding of a company’s standing, aiding subscribers in making informed decisions.

Important Disclaimer
The ratings provided by CCLEAR, Inc.’s CapitalPulse Ratings serve as a powerful tool for gauging company performance and market sentiment, offering a unique layer of insight for investors navigating the Regulation Crowdfunding space. However, they are intended for informational and analytical purposes only and should not be the basis for investment decisions.

While CapitalPulse Ratings provide a snapshot of a company’s financial momentum and investor interest, they do not replace the essential, in-depth analysis of a company’s leadership, including the founders’ industry experience, their track record in building startups, or their proficiency in securing capital. Investors are encouraged to conduct thorough due diligence on all aspects of a company to build a complete investment profile.

Exclusive Access for Subscribers
Access to CapitalPulse Ratings is exclusive to subscribers of CCLEAR’s dataset, which represents a complete collection of all Regulation Crowdfunding offerings. This exclusivity emphasizes CCLEAR’s commitment to delivering high-quality, actionable data.

CONTACT: Yvan De Munck, Yvan@cclear.ai

About CCLEAR, Inc.
As a wholly owned subsidiary of Crowdfund Capital Advisors, LLC, CCLEAR, Inc. is a leader in Regulation Crowdfunding data analysis. The team’s involvement in developing the Regulation Crowdfunding framework positions them as a key player in the industry, equipped to provide unparalleled insights and data.

Defying Expectations: Regulation Crowdfunding Issuers Prove More Resilient Than Traditional Companies

In the dynamic world of business, longevity and success are often viewed through the prism of traditional metrics and pathways. However, recent CCLEAR¹ Data on Regulation Crowdfunding issuers paints a different picture, one that challenges conventional wisdom and suggests that businesses funded through online platforms may have a surprising edge in longevity compared to their traditionally funded counterparts.

A New Era of Business Longevity
Contrary to popular belief, businesses that seek capital online through Regulation Crowdfunding are not merely outliers or ‘last resorts.’ In fact, they might just be the vanguards of a new era of business resilience. According to data analyzed by Crowdfund Capital Advisors, there’s a compelling trend that emerges: businesses funded through Regulation Crowdfunding exhibit a higher survival rate than the general business population.

“The Bureau of Labor and Statistics reports that approximately 50% of all new businesses fail within five years. Yet, our analysis of over 6,800 companies engaged in Regulation Crowdfunding tells a different story. Here, only 17.76% of funded companies have gone out of business, a stark contrast to the national average,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors. “This is a significant finding that underscores the viability and strength of Regulation Crowdfunding as a funding mechanism.”

The Data Speaks: Visualizing Success Over Time
Employing Tableau for an in-depth analysis, our team effectively visualized the data to shed light on significant patterns. One of the most revealing visualizations is the survival rate over time, segmented by the year of funding. This line chart (below) uncovers a critical insight: companies funded before 2019 demonstrate a remarkable tenacity, with a higher-than-expected rate of continuing operations. This observation notably contrasts with the Bureau of Labor and Statistics’ findings, which suggest a higher likelihood of failure for businesses as they age. Companies utilizing Regulation Crowdfunding defy the typical business failure rates in their later years and have a very high survival rate in the years surrounding their funding.

Startups vs Established Companies: A Surprising Revelation
While established companies funded through Regulation Crowdfunding show admirable resilience, the data on startups is particularly striking. “Even though startups are traditionally seen as higher risk, those funded via Regulation Crowdfunding are defying expectations. The data indicates that these startups have a better chance of survival than many of their counterparts in the traditional business world,” Neiss observes.

While established companies and startups show varying degrees of resilience, another layer of analysis presents an even more compelling narrative about diversity in business success. In the realm of Regulation Crowdfunding, 90.4% of companies founded by women are still operational, compared to 81.6% of those founded by men. Similarly, businesses founded by minorities exhibit a commendable survival rate of 87.8%, slightly higher than the 82% for companies founded by non-minorities.

These statistics not only highlight the significant role of diversity in business success but also challenge some of the traditional biases prevalent in business funding. The success rates of women and minority-founded companies in the Regulation Crowdfunding sphere are not just numbers; they represent a shift in the entrepreneurial landscape, where access to capital through alternative platforms is enabling a broader range of founders to succeed. This trend is a positive indication that the democratization of funding could be contributing to a more inclusive and diverse business environment.

An additional layer of insight is revealed when examining the correlation between the revenue and survival status of companies. The data shows a clear trend: companies with higher revenue bands tend to have a higher survival rate. This pattern indicates that financial robustness, reflected in their revenue figures, plays a crucial role in the longevity of a business. Specifically, companies in the higher revenue bands are more likely to be operational, which could point to a direct relationship between financial health and business survival.

Equally telling is the relationship between the amount of capital raised and business status. Businesses that secured higher funding through Regulation Crowdfunding demonstrate a noticeably lower closure rate than those that raised smaller sums. This suggests that the level of funding acquired not only provides the necessary capital for growth but also serves as a marker of investor confidence and business viability. It appears that higher funding targets correlate with better business resilience, further underscoring the importance of access to adequate capital in ensuring business longevity.

“These trends, when combined with the previously discussed insights on the success rates of women and minority-founded companies, paint a picture of an evolving business landscape. Regulation Crowdfunding is not only facilitating a higher survival rate across the board but is also promoting diversity and financial stability, challenging traditional narratives in the business funding domain,” said Neiss.

Policy Implications: Time for a Change
This data challenges the notion of adverse selection in Regulation Crowdfunding. “Far from being a haven for ‘bad seeds,’ these platforms appear to be nurturing businesses with a higher propensity for survival,” Neiss explains. “It’s a testament to the power of community support, due diligence, and perhaps, the democratization of funding.”

Given these insights, Neiss advocates for reevaluating current policies: “The current cap of $5 million for Regulation Crowdfunding might be unduly limiting. Considering these businesses’ apparent resilience and success rate, raising the cap to $20 million could be a bold step forward, enabling more companies to benefit from this pathway to success.”

Conclusion: A Paradigm Shift in Funding and Success
The world of business funding is witnessing a paradigm shift. Regulation Crowdfunding is not just an alternative funding route but a potentially more viable one for many businesses. “This data doesn’t just speak; it heralds a new era of business resilience and success,” concludes Neiss. As we move forward, it’s crucial for both entrepreneurs and policymakers to heed these numbers and embrace the changing landscape of business financing.

1. CCLEAR is the data division of Crowdfund Capital Advisors. CCLEAR has a 100% complete dataset of all Regulation Crowdfunding offerings that is inclusive of more than 6,800 companies and 7,900 offerings including business status, investor sentiment, valuation, and more.

Unlock the Secrets of Investment Crowdfunding: Exclusive 50% Pre-Order Discount!

Are you ready to navigate the intricate world of investment crowdfunding in 2023? Our 2023 Annual Investment Crowdfunding Report: A Game of Chess comes out in January to guide you through the dynamic landscape.

In this year’s edition, we delve into the economic chess game, marked by Federal Reserve’s maneuvers, the roller-coaster stock market, and geopolitical tensions. Despite these challenges, discover how investor sentiment in the crowdfunding space has shown incredible resilience, with record-breaking investment trends.

Key Highlights of the 2023 Report:

• Over seven years of comprehensive data analysis.
• Insightful exploration of market dynamics, investor behavior, and economic impacts.
• A staggering 130 pages, adorned with nearly 100 charts, graphs, and images.
• A special focus on the roles of women and minorities in crowdfunding.
• Predictions for 2024, identifying emerging opportunities in a shifting landscape.

Special Pre-Order Offer: Secure your copy now at an exclusive 50% discount! This offer is only valid until December 31st, 2023. Learn more and preorder here.

Don’t miss this opportunity to gain unparalleled insights into the investment crowdfunding world. Pre-order your copy today and be prepared for the opportunities and challenges of 2024.

Capital Ideas: Sherwood Neiss on the Evolution of Crowdfunding

The following is a reprint of the article. The original can be found here. 

With the investment crowdfunding industry surpassing the $2 billion mark and involving over 6,600 companies conducting 7,600 offerings across 580 industries, Capital Ideas checks in with Sherwood “Woodie” Neiss, one of the early architects of what evolved into Regulation Crowdfunding [Reg CF]. Among other things, Woodie is now employing AI as part of his effort to collect, analyze, and disseminate data to enable the crowdfunding industry to grow further. Hear Woodie discuss his efforts and some of the regulatory barriers facing the industry including CPA reviews, regulatory exposure for CF platforms, and accredited investor restrictions.

Woodie highlights the growth and success of equity crowdfunding since its inception. He mentions the database his firm Crowdfund Capital Advisors created to collect information on companies raising money through Regulation Crowdfunding. The data reveals a significant increase in committed capital, with October 2023 recording $52.4 million, marking a substantial shift from the initial slow adoption.

One noteworthy transformation is the shift in the profile of companies participating. Initially dominated by pre-revenue startups, the industry has seen a change after the SEC lifted the cap from $1 million to $5 million in 2021. Now, 65% of companies are post-revenue and over three years old. The average raise has also increased, reaching $715,000 in October.

Role of AI in Crowdfunding
Woodie delves into the challenges faced by the crowdfunding industry, emphasizing the lack of media coverage and institutional capital. To address these challenges, he introduces the concept of using AI, specifically machine learning algorithms, to analyze and predict the success of crowdfunding campaigns.

The algorithm developed by Crowdfund Capital Advisors examines signals from companies that have succeeded in crowdfunding, such as revenue changes, expense changes, earnings changes, and valuations. The goal is to identify patterns that indicate potential success. This data-driven approach allows for weekly predictive models that recommend companies for further human evaluation.

Application of AI in Investment Decision-Making
Woodie explains the investment process at D3 VC, a $5 million starter fund aiming to invest $25,000 into 200 companies. The algorithm guides the selection process, considering signals from successful companies and investor sentiment. By backtesting the algorithm against successful companies like Boxable, the team aims to demonstrate the effectiveness of their approach.

He emphasizes the potential for institutional capital to enter the crowdfunding market if AI-driven algorithms can provide reliable signals for early-stage companies. The vision is to attract larger funds by showcasing successful outcomes and offering a diversified investment strategy.

Regulatory Impediments and Gray Areas
Neiss acknowledges regulatory impediments within the crowdfunding space. He addresses issuer concerns about CPA reviews and emphasizes the importance of third-party verification for investor confidence. Neiss suggests that despite complaints, there are resources available for issuers to navigate regulatory requirements.

He also highlights gray areas, particularly concerning platform accountability and potential enforcement actions. Neiss advocates for clear regulations and accountability for crowdfunding platforms while suggesting that the industry needs to address these issues collectively.

Closing Thoughts and Future Prospects
In the end, Woodie expresses optimism about the crowdfunding industry’s future. He acknowledges the industry’s achievements and diverse participation across various sectors. He calls for continued efforts to raise the Regulation Crowdfunding cap from $5 million to $20 million, arguing that the industry has proven its viability and is ready for further expansion.

Woodie provides a comprehensive overview of equity crowdfunding’s journey, the role of AI, regulatory challenges, and the potential for institutional capital to play a more significant role in the future. Woodie’s insights contribute to the ongoing dialogue about the evolution and maturation of crowdfunding as a viable alternative finance option.

CCA Appears on This Week in Crowdfunding

Sherwood Neiss and Yvan De Munck of CClear, the industry leader in Reg CF data,  join Brendan Carberry and Connor Fata for another enlightening episode of This Week in Crowdfunding as they discuss the latest breakthroughs and trends in crowdfunding, finance, and technology. They talk about what they do and release their monthly crowdfunding report EXCLUSIVELY on the pod!

Welcome to Next Big Thing HQ, your premier podcast destination specializing in the equity crowdfunding landscape. Hosted by Brendan Carberry and Connor Fata, we strive to dissolve the barriers that often separate crowdfunding investors from the visionary founders they back. Through riveting interviews with emerging entrepreneurs, in-depth analysis of market trends, and nuanced discussions on the future of innovation, we create a unique platform where investors meet pioneers. Whether you’re an equity crowdfunding investor, an aspiring founder, or simply intrigued by groundbreaking technologies and ideas, Next Big Thing HQ is your go-to source for staying ahead of the curve. Subscribe now and be part of the community that witnesses the future unfold, one investment at a time. #NextBigThingHQ #NBTHQ

Capital Ideas Podcast with CCA’s Sherwood Neiss

With the investment crowdfunding industry surpassing the $2 billion mark involving over 6,800 companies conducting 7,900 offerings across 580 industries, Capital Ideas checks in with Woodie Neiss, one of the early architects of what evolved into Regulation Crowdfunding. Among other things, Woodie is now employing AI as part of his effort to collect, analyze, and disseminate data to enable the crowdfunding industry to grow. Hear Woodie discuss his efforts and some of the regulatory barriers facing the industry including CPA reviews, regulatory exposure for CF platforms, and accredited investor restrictions.

Investment Crowdfunding November 2023 Summary

In November 2023, the investment crowdfunding landscape continued to demonstrate resilience amidst a complex mix of global and domestic events.

Market Dynamics – The Backdrop

The global stage in November was dominated by the war in Gaza, which, being regional in nature, did not significantly disrupt the markets. In contrast, the ongoing conflict in Ukraine continued to cause volatility due to its impact on global food supply and OPEC continues to try to raise energy costs.

The Federal Reserve held interest rates steady, with core inflation showing more stabilization, boosting market confidence. However, future rate hikes were not ruled out. The market is now anticipating a possible interest rate reduction heading into 2024.

Despite strikes, the economy remained resilient, although job growth slowed and unemployment claims reached their highest level since late 2021. Most companies reported year-over-year growth in earnings, but sales of new and existing homes retreated, primarily due to lack of inventory and rising mortgage rates. The Dow hit a new high for the year as investor confidence in a soft-landing becomes more of a reality.

Investment crowdfunding saw another strong month in terms of capital, a growth in issuer sentiment and a retraction in checks written although they remain high.

Celebrating a Milestone: Investment Crowdfunding Soars Beyond $2 Billion

Watch the SuperCrowdHour webinar with Woodie Neiss.

Woodie Neiss recently wrote a piece celebrating this milestone with his followers, which I’m glad to have received. I instantly invited him to join us today to share the insights with us live.

Here’s a short recap of his post:

The investment crowdfunding industry has achieved a remarkable milestone by surpassing the $2 billion mark, marking a transformative moment in the world of finance. This achievement is not merely a numerical feat but a testament to the community’s innovative and diverse nature. Several key points emerge from this groundbreaking accomplishment.

First, it dispels misconceptions about crowdfunding’s reach and influence. The $2 billion milestone proves that investors, tech disruptors, and visionary entrepreneurs, regardless of their location, are actively participating. Geographical barriers are no longer obstacles as businesses outside major hubs like Silicon Valley attract substantial investments.

The industry’s rapid evolution from $1 billion to $2 billion is a testament to its growth, with over 6,400 companies conducting 7,400 offerings, boasting a 69% success rate. This dynamism and resilience are evident through the increasing participation of funding portals and brokers.

Moreover, investment crowdfunding is fostering diversity across various sectors, from tech companies to restaurants and personal services. This diversity is driving innovation and significant economic impact across 580 industries.

Key players like Wefunder, StartEngine, and Republic, along with the Securities and Exchange Commission’s involvement, have empowered entrepreneurs, particularly women and minorities, to access capital without traditional biases.

The economic transformation is significant, with these investments generating local jobs and commerce, positively impacting communities. However, challenges like limited media coverage and the absence of institutional investment persist.

The future of investment crowdfunding appears promising, driven by organic growth, word-of-mouth awareness, and positive outcomes. This trend is expected to reshape traditional investment approaches, democratize access to capital, and leverage technology advancements.

Notable success stories like Boxable’s astounding valuation increase emphasize the potential of this industry. As the industry continues to evolve, it holds exciting prospects for investors, entrepreneurs, and the public, potentially fueled further by regulatory changes.

In summary, the investment crowdfunding industry’s journey to $2 billion showcases its growth, diversity, and economic impact while setting the stage for a more inclusive and innovative business landscape.

Honeycomb – A Debt Crowdfunding Platform on a Hot Streak

Honeycomb – Debt Crowdfunding on a Hot Streak

Debt Crowdfunding may only make up 23% of all Regulation Crowdfunding offerings and 7.4% of all the capital raised, but its steady growth tells a compelling story of its rising importance in SME lending. In a time when banks are reducing their lending activities, small businesses, especially those facing financial challenges, are turning towards alternative funding sources. Debt crowdfunding is becoming a crucial support for many local businesses, providing a stable financial option during tough economic times.

The appeal of debt crowdfunding is clear and wide-ranging. It opens up access to funds, allowing businesses, even those seen as too risky by traditional lenders, to get the essential funding they need, which in turn supports innovation and new business ventures. Moreover, it creates a supportive relationship between businesses and the community; local businesses get the necessary funds to grow, while community members, now investors, get to be part of local economic development.

2023 has seen a notable increase in debt crowdfunding investors, attracted by an enticing average interest rate close to 11% and average loans rising to $140K, a 7.7% increase YoY. Platforms like Honeycomb are leading this movement, hosting an impressive 41% of all industry debt offerings this year. Our chat below with George Cook, CEO of Honeycomb Credit, sheds light on the forces powering this growing sector, exploring the detailed dynamics of debt crowdfunding and its vital role in supporting SMEs through economic challenges while also looking into its ability to enhance inclusivity, accessibility, and sustainable development in business financing.

Q. Please briefly describe Honeycomb for our readers who might not be familiar with it.
A. Honeycomb Credit is a website for anyone who wants to invest in vetted, locally-owned small businesses. Through our platform, investors can unlock fair funding for growing businesses while potentially receiving returns of 10-14% annually and supporting small businesses and communities that are important to them.

I come from a community banking background, and I saw that bank consolidation was leaving a lot of creditworthy small businesses behind. I co-founded Honeycomb to create a place to connect businesses that are being left behind by traditional lenders with everyday investors looking for high-yield investments that they can feel good about adding to their portfolios.

Q. We’ve noticed a significant uptick in debt offerings on Honeycomb. In fact, it appears you’re on track for a record-breaking year in terms of new offerings. What factors do you attribute to this surge?
A. Yes! Since the beginning of this year, we have nearly tripled the number of businesses we are working with on a monthly basis. Beyond Honeycomb getting better at reaching small businesses, there are a few larger factors at play. Firstly, we have been fortunate enough to receive some positive national press, including prominent coverage in a recent Wall Street Journal article and being named by CNBC as one of the top 200 FinTech’s in the world. This coverage helps to cement our leadership in debt crowdfunding while demonstrating the staying power of this new way to invest.

Secondly, following the banking crisis earlier this year, we have seen a sharp pullback in commercial lending from traditional bank lenders. This means highly creditworthy small businesses with long-standing banking relationships are not able to rely on their banks in the same way they could at the beginning of the year. Correspondingly, these businesses are increasingly looking for alternative ways to fund their growth, and community-sourced capital is an increasingly attractive option.

Q. With the recent moves by the Fed on interest rates, how has this impacted issuers on Honeycomb?
A. By definition, the Fed is raising rates to reduce the amount of capital being borrowed and we do hear from some businesses that they are postponing an expansion project until rates are lower. That said, we still see the cream of the crop in the market for capital. These are businesses who, despite higher inflation and economic uncertainty, are still finding profitable paths to growth. Coupled with the decline in bank lending, we are seeing more and more of these aspirational businesses joining the platform.

Q. While it seems like a positive trend for investors, what feedback or sentiments are you receiving from them?
A. Investors are thrilled with the higher rate environment, particularly from a fixed-income asset class that begins generating cash payments in months instead of years. We are seeing substantial growth in both first-time investors making modest $100 or $250 investments alongside high net-worth individuals who are looking to build $50,000+ portfolios on the platform. The beauty of our model is that it truly offers an opportunity to choose your own adventure, whether you are looking to make small investments in one or two businesses you know and love or if you want to build larger portfolios across industries and geographies.

Q. It’s impressive to see that you’re set to break another record this quarter with capital raised, already surpassing last year’s figure by 157%. Is this growth primarily due to an increase in issuers, or are issuers seeking more capital than before?
A. We are seeing a small increase in average offering sizes, but we remain committed to serving Main Street businesses with relatively modest capital needs. The majority of the growth therefore is coming from the volume of offerings on the Honeycomb site. I believe this creates a really delightful experience for investors who often liken the experience of scanning our explore page to being a ‘shark’. They get to hear more and more of these incredibly passionate entrepreneurial stories and choose which they want to support.

Q. We’ve observed a notable presence of women and minority issuers on Honeycomb. Is this a natural occurrence, or is there a concerted effort on your part to engage these groups? Additionally, there seems to be a higher percentage of women/minority founders in debt offerings compared to equity. Why do you think this trend exists?
A. The team is very conscientious about making sure that funds are flowing to communities that are often overlooked by traditional lenders. It turns out that often correlates to a very diverse set of business owners – so far this year 72% of our business had a women owner, 59% had a BIPOC owner, and 12% were veteran-owned. These numbers are unheard of in small business lending.

We often think about entrepreneurship as what happens at glamorous high-tech startups in Silicon Valley, but the reality is that the overwhelming majority of entrepreneurial pursuits in the US are for brick-and-mortar, cash-flowing small businesses. These Main Street entrepreneurs are disproportionately women, people of color, and immigrants and it is only natural that they are reflected in our metrics accordingly.

Q. On average, what amount can issuers on Honeycomb expect to raise if their campaign is successful?
A. Our average offering is around $55,000. Our sweet spot is between $25,000 and $250,000.

Q. For potential issuers considering Honeycomb, what advice would you give them to ensure a successful offering?
A. Firstly, get your financial house in order – get a bookkeeper, manage the business to the numbers, and understand the levers that can help you grow your business to the next level. We often find businesses who would like to work with us but they don’t have their financials in order or they are unable to build a compelling business plan for their proposed expansion because they don’t fully understand their path to growth.

Secondly, build your audience – the majority of investment capital on Honeycomb comes from customers and fans of the business. And that’s a good thing! Getting your customers invested in your business means they will champion your success and will show unflappable loyalty for years to come. But, even if your customers love you, if you don’t have the channels to tell your customers about your offering – whether social media, email, foot traffic, etc – then it will be hard to share your offering with them.

Q. Looking ahead, where do you envision Honeycomb in the next few years?
A. Our mission at Honeycomb is to unlock financial opportunities to build vibrant, financially empowered communities. To do that, we are going to continue to make the idea of community capital a household concept and make it increasingly accessible to small businesses and investors. We have a lot of exciting features rolling out in 2024, including opportunities to more seamlessly bring the investment experience into the brick-and-mortar visit and products to allow investors to build portfolios of loans on the site more easily.

Much thanks to George and the team at Honeycomb! We firmly believe this side of the investment crowdfunding market will see significant traction over the next few years and we look forward to following their success.

Getting your hands on a full list of debt crowdfunding options can really make a difference for investors, businesses, and analysts. It’s not just about finding new investment chances. It’s also about having the right info to make smart investment choices and understanding what’s happening in the market right now. It helps businesses see where they stand and plan their next move in a growing market. For researchers and academics, it’s a great source of data to study the changing world of alternative financing and its effects on small and medium businesses.

How to Launch a Successful Crowdfunding Campaign for Your Small Business

Q3 2023 Top Crowdfunding Platforms

The results are in. Q3 was a fascinating quarter for the industry. Fewer issuers, more capital, less investors. It had it all. So who were the leading platforms of the quarter? Well here’s your list!

Celebrating a Milestone: Investment Crowdfunding Soars Beyond $2 Billion!

We’re thrilled to announce a groundbreaking achievement that redefines the landscape of investment crowdfunding: the industry has crossed the remarkable $2 billion investment milestone. This momentous event holds profound significance, not only as a numerical accomplishment but as a testament to the strength of a community driven by innovation, diversity, and transformative potential.

1. Proving the Skeptics Wrong: The $2 billion milestone shatters misconceptions about crowdfunding’s reach and influence. It highlights the unwavering belief of a dynamic investor community, including customers who champion businesses they love, tech disruptors, and visionary entrepreneurs who are breaking traditional molds. This achievement demonstrates that geographical boundaries are no longer barriers, as businesses outside Silicon Valley, New York, Boston, and Los Angeles thrive and attract substantial investments.
2. Rapid Evolution: The industry’s journey from $1 billion to $2 billion investment is a testament to its rapid growth. What took over five years to achieve in the first billion happened in just under two years for the second. Over 6,400 companies have filed to raise funds, conducting an astonishing 7,400 offerings with an unprecedented 69% success rate. With over 110 registered funding portals and increasing broker participation, the industry’s evolution showcases its dynamism and resilience.
3. Unveiling Diversity: While software, tech, and media companies have dominated equity funding, sectors like restaurants and personal services are thriving in the debt sector. Investment crowdfunding empowers a diverse array of businesses in over 580 industries, fostering innovation and generating substantial economic impact.
4. Driving Forces: Key players like Wefunder, StartEngine, Republic, and more have fueled this growth, alongside the Securities and Exchange Commission which elevated the fundraising cap from $1 million to $5 million. Their contributions have empowered entrepreneurs, especially women and minorities, to access capital free from traditional biases.
5. Economic Transformation: The investment crowdfunding phenomenon is changing the face of entrepreneurship. Over 85% of these businesses raise funds beyond major financial centers, pouring billions into local economies and supporting more than 400,000 jobs. The positive influence radiates through job opportunities and local commerce.
6. Tackling Challenges: Despite progress, challenges persist. Limited media coverage hampers awareness of crowdfunding’s transformative impact, and the lack of institutional investment necessitated us to launch D3VC, a venture fund aimed at connecting venture capital with promising crowdfunding ventures.
7. Economic Ripple Effect: These investments aren’t confined to balance sheets. Businesses funded through crowdfunding inject nearly $5B into communities, supporting jobs, salaries, and local businesses, enhancing the socio-economic fabric.
8. Future Outlook: The investment crowdfunding industry’s rapid growth has been fueled by an organic movement, driven by word-of-mouth awareness, and platform/industry promotion. As investors and entrepreneurs experience positive outcomes, their enthusiasm spreads naturally, fostering a self-sustaining network effect. This trend is expected to persist, reshaping traditional investment approaches and democratizing access to capital, while technology advancements and evolving regulations position investment crowdfunding as a transformative force in the future of fundraising and investment.
9. Success Stories: The journey wouldn’t be complete without standout examples like Boxable, which transformed from a $42 million valuation to an astonishing $3.4 billion, turning a $25K investment into a multi-million-dollar success.
10. Anticipating Tomorrow: The future holds exciting prospects. Investors can expect robust returns, entrepreneurs will gain unprecedented access to engaged investor networks that also serve as marketing allies, and the public will enjoy innovative technologies and services that elevate local communities. Of course all of this could be accelerated if the SEC were to move the maximum an issuer can raise from $5M to $20M.

The investment crowdfunding industry’s journey to $2 billion is a collective accomplishment. Together, we’ve shattered ceilings and paved the way for a more inclusive, vibrant, and innovative business landscape.

Stay tuned for more updates as we continue to shape the future of investment crowdfunding!