Dear CCA Followers,
I wanted to reach out and provide an exciting update on the progress of D3VC since our initial introduction. The response and engagement we have received have been truly remarkable, and I am grateful for your interest and support. Here’s a recap of our recent milestones:
Commitments: We are thrilled to share that we have already received commitments of $775K towards Fund I. The enthusiasm and belief in our data-driven approach and unique investment opportunities are truly inspiring. “I am incredibly thrilled by the overwhelming interest and support we have received for Fund I. The fact that we have already garnered $775K of commitments towards our $5M target is truly exciting,” said Sherwood Neiss, D3VC Founding Partner. “It is a testament to the belief and confidence that our prospective investors have in our data-driven approach and the unique investment opportunities we are set to offer. I am grateful for their trust and excited to embark on this journey together towards building a successful and impactful fund.”
Media: We are delighted to share that The Retail Capitalist recently covered our story, highlighting our AI-driven quant fund and focus on equity crowdfunding. The article recognized our comprehensive proprietary dataset and backtested results, showcasing our goal of identifying companies likely to receive follow-on venture capital funding. “D3VC.ai is in a fortuitous position of having a completely full proprietary dataset of all offerings since equity crowdfunding started. 6,100+ companies, 125+ data points on each, and a 6 person team with tremendous experience in AI and big data, they backtested their dataset with impressive results … their goal is to identify companies most likely to have that next follow-on round.”
Prospects: Our algorithm is actively at work, providing us with weekly predictions. Our investment committee diligently evaluates these prospects, and we have already performed due diligence on 60 companies, identifying several promising opportunities that align with our investment thesis.
Don’t miss out on this opportunity to join our select group of early investors in the equity crowdfunding space. By joining our waitlist, you will secure priority access to our upcoming investment opportunities.
We’re thrilled to have you join us on this journey and shape the future of early-stage investing. Stay tuned for more updates as we progress towards our official launch.
Warm regards,
Sherwood Neiss
Co-Founder/GP
D3VC
Please note that this email is intended solely for informational purposes and should not be considered as an offer to sell or a solicitation to buy securities. Any investment in D3VC or its affiliated funds will be made solely to accredited investors pursuant to Regulation D, Rule 506(c) of the Securities Act of 1933. Participation in our investment opportunities is subject to verification of accreditation status and compliance with applicable securities laws. Please consult with your legal and financial advisors before making any investment decisions.
Join the Waitlist |
Dear CCA Followers,
We are thrilled to announce our next endeavor, the soft launch of D3VC, a Data Driven Digital Venture Capital firm focused on early-stage investments in the equity crowdfunding industry. As a valued member of our community, we wanted to give you a first look and invite you to join our waitlist to gain exclusive access to exciting investment opportunities. Here’s why we’re unique:
Don’t miss out on this opportunity to be part of our select group of early investors in the equity crowdfunding space. Join our waitlist today and secure your spot for priority access to our upcoming investment opportunities.
We’re excited to embark on this journey with you and shape the future of early-stage investing. Stay tuned for more updates as we prepare for the official launch.
Warm regards,
Sherwood Neiss
Co-Founder/GP
D3VC
Please note that this email is intended solely for informational purposes and should not be considered as an offer to sell or a solicitation to buy securities. Any investment in D3VC or its affiliated funds will be made solely to accredited investors pursuant to Regulation D, Rule 506(c) of the Securities Act of 1933. Participation in our investment opportunities is subject to verification of accreditation status and compliance with applicable securities laws. Please consult with your legal and financial advisors before making any investment decisions.
Learn More |
If you are anything like us, you are spending a lot of time in front of ChatGPT and its equivalents. The use cases are countless and with our unique 100% complete dataset of every Regulation Crowdfunding offering, the ability to analyze what is happening in this industry just exploded. Particularly when you consider layering on our dataset with datasets comparing states, economic output, other parts of the private capital markets, etc.
Back in 2016, we launched the industry’s first data aggregator. We collect 125 data points on every company that is raising capital online from who they are, when they incorporated, what industry they are in, to where they are located, their valuation, their financials, daily amount committed and daily investor count. This data has been available on Bloomberg’s Terminal since 2020.
We track not only each of these deals while they are live but track their successive rounds and their progress via their annual reports. Needless to say our tiny dataset when we started is quite huge today. You’ve seen much of our analysis in our monthly recaps and our annual report.
We were fascinated with what ChatGPT can do so we asked it the following: “Create an algorithm that 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 3-digit NAICS code, 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.”
Here’s what it had to say:
Certainly, here is an algorithm that reviews an investment crowdfunding offering and rates it from good to bad based on various factors:
Overall score = (Incorporation date score x 0.1) + (Location score x 0.2) + (Sales score x 0.2) + (Valuation score x 0.2) + (Funding score x 0.2) + (Cash score x 0.05) + (Accounts receivables score x 0.05) + (Short-term debt score x 0.05) + (Long-term debt score x 0.05) + (Income score x 0.05)
Pretty interesting right? While this doesn’t take into account necessary diligence needed on founders, their industry experience, their startup experience, or the experience at raising capital. It does provide a way to narrow down the focus.
What do you think? Are you looking for data for machine learning or AI that you can use in conjunction with other data sets? If so, contact us for more information!
Contact us |
In March 2023, Crowdfund Capital Advisors released its annual report of the top up-and-coming cities for Pre-IPO startups. Each city was ranked according to our “Startup Viability IndexTM” (SVI) by the amount of money invested into pre-IPO startups, the number of fundraising campaigns, the average valuation for companies, the number of investors into fundraising rounds, the success rate of campaigns, and the number of unique industries represented. Our team of researchers calculated a score based on how impactful each category was to local entrepreneurship, technological innovation, economic stimulus, and job creation. Below is the 2023 list of the top 100. For more information on the Top 100, contact data@theccagroup.com.
Wefunder secures the top spot among online investment platforms. The platform leads in deals funded; capital raised, and the number of investors.
DENVER, CO, UNITED STATES, February 9, 2023 /– Last week, Crowdfund Capital Advisors (CCA) released its 2022 Investment Crowdfunding Annual Report. This report is the most comprehensive market analysis of Investment Crowdfunding. Investment Crowdfunding (aka Regulation Crowdfunding) allows any startup or small business to raise up to $5 million online from their customers, family, friends, or followers. Issuers must file certain company and financial disclosures, and the offer must take place on crowdfunding platforms (aka online investment platforms) registered with the Securities and Exchange Commission and overseen by FINRA. The industry was born out of the 2012 JOBS Act and launched in 2016. The report spans 91 months of activity and covers 6,500 deals from 5,600 Pre-IPO startups and small businesses.
In 2022 over 320,000 investors deployed nearly half a billion dollars into 1,100 deals. Deal volume hit record levels within Investment Crowdfunding, and while overall capital was down from 2021 due to geopolitical and macroeconomic events, investors’ check size hit a record level. There were 78 active online investment platforms in 2022.
“Wefunder was the online investment platform leader by deals, number of investments made, and capital,” said Sherwood Neiss, Principal at CCA. “They helped deliver $164.1 million by 88,000 investors to one out of every three funded deals. An impressive feat.”
Deals like Hemp insulation manufacturer, Hempitecture out of Ketchum, Idaho, real estate crowdfunding platform Equity Multiple, and cyber security company Atakama out of New York catapulted Wefunder to the top. The syndication of Venture-led deals on the platform also made an impact.
“2022 was an exciting year for Wefunder,” said Jonny Price, VP of Fundraising at Wefunder. “With the roll-out of the “Community Round” concept — epitomized by Replit allocating $5 million of their Series B to let their customers invest alongside VCs like Andreessen Horowitz.”
Wefunder was one of the first online investment platforms to register with the Securities and Exchange Commission. StartEngine came in second for investments, $73.9M, and deals, 298, but was in third for the number of investors, 42.2K. Republic had the second highest number of investments at 71.5K and was third for investments, $63.1M, and deals, 126.
Wefunder also leads the industry in total investments, deals funded, and the number of investors since the industry launched in 2016.
When asked what 2023 would hold, Price said, “As the availability and flexibility of venture capital for founders continue to be constrained in 2023, we expect to see a growing number of founders open up ownership to their users and fans.”
A full list of platform rankings is available on crowdfundcapitaladvisors.com. The 105-page report, including 100 charts, tables, graphs, and images, is available here. Scholarships and special discounts are available by emailing sales@theccagroup.com
2022 was a challenging year for venture-back companies. Supply chain issues, soaring inflation, skyrocketing gas prices, geopolitical crises, and market volatility sent us on a wild ride. But there were many silver linings for Investment Crowdfunding. Last week we released our 7th annual Year in Review report. This 105-page report (our longest yet) contains 100 charts, tables, images, and maps.
Here are seven charts that sum up key findings:
Pitchbook Angel/Seed Deals are Trending Down. Investment Crowdfunding Deals are Trending Up and Hit Record Highs
Pitchbook released the “Q4 Venture Monitor First Look” that breaks down its data. While they show Angel and Seed deals declining in 2022, Investment Crowdfunding saw the most deals funded in history. Also, this trendline continues to show an increase in funded deals. As more issuers find it challenging to access capital in 2023, we expect to see them turn online for capital.
The Valley of Death is Dead Thanks to Investment Crowdfunding
Much has been written about the Valley of Death. It refers to a crucial early phase of a new venture when work has begun, but a company hasn’t generated sufficient revenue to support its growth. In this case, outside capital is a necessity that either comes from an entrepreneur’s savings or access to credit. After seven years of Investment Crowdfunding experience and the growth in average raises, we can officially announce that the ‘Valley of Death’ is dead. The average raise since the industry launched has grown to $365K, expanding beyond where the Valley existed previously; $25K to $250K. With the maximum issuers can raise now at $5 million, there is much room for successful issuers to perform follow-on raises to not only get them through the Valley of Death but beyond it.
Naysayers be Damned. Investment Crowdfunding Issuers Appear Less Risky
The profile of the average successful investment crowdfunding issuer is changing. The data finds that most of them can be seen as less risky. They tend to be older, are post-revenue, and have average revenues over $1 million. Investors see the logic. The more established issuers raised more money and had more investors than their startup counterparts. As larger, more established issuers come online, this will further derisk investment in this space.
Investment Crowdfunding has Proven its Ability to Democratize Access to Capital
It used to be that if you wanted to access Venture capital, you needed to reside in or near Silicon Valley, New York, or Boston. However, thanks to Investment Crowdfunding, we see that it has successfully been able to democratize access to capital across the country. Even more importantly, the data shows that women and minority entrepreneurs (that routinely struggle to access capital) have had greater success within Investment Crowdfunding and are raising up to 50% of the capital. Show us where else the private capital markets have been able to accomplish that!
Investment Crowdfunding is the Economic Engine we Envisioned
Issuers successful with Investment Crowdfunding are scaling startups and small businesses. They create products and services. Pay business, sales, and payroll taxes. And are massive consumers of local and regional products and services. Investment Crowdfunding issuers are responsible for pumping more than $4 billion into our economy since the industry launched in 2016. All of this capital is going into over 1,600 communities across the USA. This is a local economic stimulus unlike we’ve ever seen. If our government officials are looking for ways to promote economic development, they should focus their attention on Investment Crowdfunding issuers.
Investment Crowdfunding Makes its Namesake, “The JOBS Act,” Proud
Since Investment Crowdfunding began, Issuers successful with Investment Crowdfunding are responsible for supporting over 226,000 jobs. We believe this is an underestimate because it doesn’t take into account issuers that reported no full-time employees but either have grown to support them or outsource jobs altogether. Either way, we went to Washington, DC, and promised jobs. And one can see the industry is delivering on it! Whoever came up with the acronym “The JOBS Act” deserves an award!
Investment Crowdfunding Will Make Some Average American Investors Millionaires
Liquidity is the Holy Grail for private company investors. Why would investors pour billions of dollars into Private Equity or Venture funds if not? Investment Crowdfunding allowed the average American to play the role of mini-VC and invest in pre-IPO startups that they believe in for the first time in history. A small percentage of these will most likely go on to phenomenal exits. If and when that happens, many millionaires will be made, and they will be your next-door neighbor. Over $54B of value is currently sitting inside successful Investment Crowdfunding issuers. Only $1.6 billion has been invested to date by Investment Crowdfunding investors. You do the math. Someone is going to get rich …
And this scratches the surface. In the report, we list all million-dollar-plus raises from 2022. We analyze what would have happened if someone had just invested in all million-dollar-plus deals. And much more! Don’t wait; download your copy now!
DENVER, CO, UNITED STATES, February 7, 2023 /EINPresswire.com/ — Last week, Crowdfund Capital Advisors (CCA) released its 2022 Investment Crowdfunding Annual Report. This report is the most comprehensive analysis of Investment Crowdfunding to date. Investment Crowdfunding allows any startup or small business to raise up to $5 million online from their customers, family, friends, or followers. The industry was born out of the 2012 JOBS Act and launched in 2016. The report spans 91 months of activity and covers 6,500 deals from 5,600 Pre-IPO startups and small businesses.
After seven years of experience and the growth in average raises, we can officially announce that the ‘Valley of Death’ is dead. ” Sherwood Neiss In 2022 over 320,000 investors deployed nearly half a billion dollars into 1,100 deals. Deal volume hit record levels within Investment Crowdfunding, with women and minority entrepreneurs receiving up to 50% of all the capital committed. Deals were distributed across the United States and into 687 cities including many at-risk and distressed communities.
Unlike data collected by Pitchbook that tracks Angel/Seed declining deals in 2022, Investment Crowdfunding not only saw a spike in funded deals but saw the trend increase. “This may signal that issuers are going online to raise capital from their customers, friends, family, or followers for capital versus going to Angels or VCs,” says Jason Best, Principal at CCA. “Market dynamics shifted in 2022. Angels and VCs began to pull back and focus on their portfolio investments. This forced more sophisticated issuers online for capital. We expect this trend to continue through 2022 saw the highest number of Regulation Crowdfunding funded deals while Pitchbook saw declines 2023.”
The data shows that the profile of issuers seeking Investment Crowdfunding capital is shifting as well. The average age of successfully funded issuers expanded past three years, with the vast majority of them being post-revenue. Established companies raised 45% more capital than their startup counterparts and had 20.5% more investors. Average check sizes rose, with the average raise trending higher.
The Valley of Death refers to a crucial early phase of a new venture when work has begun, but a company hasn’t generated sufficient revenue to support its growth. “In this case, outside capital is a necessity that either comes from an entrepreneur’s savings or access to credit,” says Sherwood Neiss, Principal at CCA. “After seven years of experience and the growth in average raises, we can officially announce that the ‘Valley of Death’ is dead. The average raise since the industry launched has grown to $365K, expanding beyond where the Valley existed previously; $25 to $250K. There has always been this talking point about the Valley of Death and doom and gloom. It should be nice to talk about opportunity and capital now that Investment Crowdfunding has proven itself.”
The 105-page report, including 100 charts, tables, graphs, and images, is available here. Scholarships and special discounts are available by emailing sales@theccagroup.com
This was equally felt in Investment Crowdfunding, where the industry saw its first down year for capital commitments. While investors showed up less, they wrote larger checks than ever. Issuers’ demand for capital shrunk as they postponed offerings, and valuations that rose to record highs earlier in the year began to crack and settled down to more normal seed round levels.
In 2022, over 320,000 Americans poured half a billion dollars into more than 1,500 offerings on Regulation Crowdfunding websites. Women and minorities were some of the biggest beneficiaries, and at-risk and distressed communities all across the United States saw deals. Over $4 billion was pumped into local economies thanks to Investment Crowdfunding and hundreds of thousands of jobs supported. Investment Crowdfunding is definitely living up to its namesake, the JOBS Act.
We share with the reader a list of all companies that raised over $1 million this year and have a case study that digs into what $1,000 invested into all deals that raised $1 million would be worth today. With $54 billion in enterprise value pent up and exits forthcoming, these average American crowdfund investors stand to gain.
We expect another volatile year in 2023 as the Fed struggles with the economy and markets react to inflation, jobs, and a pending recession. All this and much more in our 105-page report with 100 tables, charts, and images.
Our annual report is a comprehensive review of the online investment industry with a comparison to prior years and predictions for 2023. The data in the report is aggregated from all online investment platforms that are registered with the Securities and Exchange Commission (SEC) and overseen by FINRA. Each day, data is collected, normalized, aggregated, and reported to Bloomberg for industry analysis and coverage.
DENVER, CO, UNITED STATES, January 4, 2023 /EINPresswire.com/ — In its upcoming report “What a Wild Ride,” Crowdfund Capital Advisors (CCA) releases findings from its annual industry survey. Since launching in 2016, over $1.6B has been committed to more than 5,600 startups and small businesses by 1.6M online investors. Issuers were present in over 1,600 cities across the USA, including all 50 states, with women and minority founders benefitting greatly.
“The economic, social, and geopolitical turmoil of 2022 spilled over to Investment Crowdfunding,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors. “This led to a bumpy road for the industry. While demand for capital remained strong among startups and small businesses, overall investments dropped for the first time, yet average check sizes rose. Despite this, we are seeing stronger companies come online as indicated by their age and the balance sheets.”
Investment Crowdfunding allows startups and small businesses to raise up to $5M online from non-traditional (both accredited and unaccredited) investors. It was one of the most fundamental changes to the securities law as it reversed the decades-old ban on general solicitation and allowed retail investors to access early-stage investment opportunities for the first time.
Investment Crowdfunding Headlines for 2022:
1. Demand for capital among startups and small businesses was up 1.2%, with 1,529 companies running offerings. Q4, which is historically strong, saw the first quarterly drop in demand despite 2022 having the highest percentage of post-revenue issuers seeking capital.
2. Investments into startups and small businesses dropped 12.8% from last year’s record of $578.8M, causing CCA’s Online Investment Index to fall.
3. More than 320,000 investors participated in over 1,580 offerings. Investors were down from a record 543,000 in 2021. However, their average check deployed rose from $1,065 in 2021 to $1,578 in 2022, a record high.
4. The average raise fell from $450K to $365K as issuers faced 2022 headwinds. More established companies were able to raise $1.36 for every dollar their startup counterpart raised.
5. The number of jobs supported/created among these issuers tops 250,000. Continuing to prove that Investment Crowdfunding can be a jobs engine.
6. Follow-on rounds continue to grow as issuers return to their customers/community for funding versus alternative forms of capital.
7. Average and median valuations peaked at $29.6M and $12.9M, respectively, in 2022, driven by 30 offerings with $100M+ valuations.
8. The total market value of crowdfunded companies jumped from $33B to $54.2B, increasing the opportunity for market exits via acquisitions and IPOs.
9. 71.3% of offerings were successful and closed within five months. Offerings closed two months faster in 2022 than the prior year, indicating that issuers were eager to close faster.
10. California, New York, and Texas remained the top 3 states for Investment Crowdfunding by dollars invested, successful offerings, and the number of investors.
11. The number of $1M+ offerings jumped to record highs, with 21 issuers (twice as many as in 2021) raising the maximum of $5M+, continuing to prove Investment Crowdfunding a viable “Silicon Valley-sized Seed round.”
12. Issuers used 52 intermediaries to raise crowdfunding-facilitated capital, up 21% over 2021. Wefunder, StartEngine, Republic, SeedInvest, and Equifund were the top five leaders, accounting for over 83.7% of all the funding.
“It is clear that as this industry grows, the application for its use expands,” says Jason Best, Principal at Crowdfund Capital Advisors. “This is signaled by the issuers with greater revenues coming online to raise capital from their customers and communities. The capital markets face a potential recession in 2023, which will drive more of these types of issuers online.”
“Investment Crowdfunding has found its footing,” comments Neiss. “Now that we’ve experienced a year of volatility and seen how the industry adapts and responds, we can feel confident of the role Investment Crowdfunding will play in 2023. We also predict that as we pull out of this next recession and grow into the future, Investment Crowdfunding will scale to a $2.5B annual industry in 2030.”
The principals of Crowdfund Capital Advisors co-authored the framework for Regulation Crowdfunding and were invited to the White House by President Obama for their work on the legislation. They created the industry’s first data aggregator that collects information on all Investment Crowdfunding offerings. This data is currently available via the Bloomberg terminal. They serve institutional clients, nongovernment organizations, multilateral organizations, investors, and entrepreneurs in the understanding and expansion of Investment Crowdfunding. Click here to order.
|
The U.S. Securities Crowdfunding market ended Q2 mixed but showed impressive gains over the prior year. More issuers, more capital, more jobs, more revenue generating companies seeking capital, steady valuations, greater investment in certain industries (due to COVID), and average raises increasing as the new $5M cap implemented by the SEC in March went into effect. Here’s the summary:
|
|
|