How to Launch a Successful Crowdfunding Campaign for Your Small Business

Crowdfunding is not only an excellent way to raise capital but also a great way to build a community and customer base for your product or services. However, running a successful crowdfunding campaign is not easy.

In this webinar, Sherwood Neiss, Principal at Crowdfund Capital Advisors, will walk you through best practices to ensure your crowdfunding campaign reaches its funding goals and connects with your target audience on a meaningful level.

You’ll learn:

  • Setting clear funding goals and timelines
  • Identifying and connecting with your ideal backers
  • Crafting a compelling pitch and marketing strategy

CLICK HERE TO WATCH WEBINAR

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!

Platform NameWebsiteInvestments ($)Deals# Investors
Wefunderhttps://wefunder.com/$27.92M834,828
StartEnginehttps://www.startengine.com/$17.07M4811,078
Dealmakerhttps://www.dealmaker.tech/$5.25M4574
Equifundcfphttp://www.equifundcfp.com$4.35M1N/D
Vincinity Capitalhttps://vicinitycapital.com/$3.14M1N/D
VidAngel Studioshttps://studios.vidangel.com/$2.04M23,718
HoneyCombhttps://www.honeycombcredit.com/$1.96M50903
Dalmore Grouphttps://www.dalmorefg.com/$1.95M1N/D
Silicon Praire Onlinehttps://sppx.io/$1.53M281
Gigastar Markethttps://www.gigastarmarket.io/$0.87M2N/D
Republichttps://republic.co/$0.77M6486
Mainvesthttps://mainvest.com/$0.73M30779
Net Capital Fundinghttps://netcapital.com/$0.70M14N/D
The SMBXhttps://www.thesmbx.com/$0.34M10N/D
PicMii Crowdfundingwww.picmiicrowdfunding.com$0.27M5N/D
Andes Capital Grouphttps://www.andescap.com/$0.27M2172
Raise Greenhttp://www.raisegreen.com/$0.17M2N/D
Microventureshttps://microventures.com$0.08M1114
Common Ownerhttps://commonowner.com/$0.05M16
Seed at the Tablehttp://www.seedatthetable.com/$0.05M332
Small Changehttps://smallchange.com/$0.01M214
TruCrowdhttps://us.trucrowd.com/$0.00M110
Rise Up Crowdfundinghttp://riseupcrowdfunding.com/$0.00M19

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!

D3VC Algorithm Success: Cabinet Health’s Sustainable Impact and Investment Progress

By now, you have heard that we are launching an AI-driven fund, but did you know that we’ve been investing based on the fund’s algorithm and our investment committee’s decision process for a year now? In this email, we want to provide an example of one of our early investments, Cabinet Health.

Our proprietary algorithm identified Cabinet Health as a promising investment opportunity in August 2022. The week it appeared on our list, there were 568 active deals, and Cabinet Health scored an 83.1% on the algorithm. After further diligence, our team decided to invest. Since then, the company has made significant strides in its mission to revolutionize the healthcare industry with sustainable solutions.

Cabinet Health is a New York-based sustainable healthcare company that has developed a refillable and compostable medicine system. Their mission is to lessen the environmental impact of plastic medicine bottles, which currently contribute to a significant amount of plastic waste. Cabinet Health’s innovative solution involves delivering medication to customers in compostable pouches, which can then be stored in reusable glass containers.

Since our investment, Cabinet Health has demonstrated impressive growth and resilience. They have successfully raised an additional $17 million in growth funding, led by the Global Impact Fund, to fuel their rapid expansion into new categories and retail channels. This fundraising round brought the company’s total funding to $23.6 million to date. The funds have been used to further their mission of eliminating single-use plastic from the medicine and healthcare industry.

In terms of sales performance, Cabinet Health has proven its concept with investors and consumers, generating an average of 19% growth year-over-year with its over-the-counter offerings. Cabinet Health has also launched its first-ever nationwide pill bottle recycling program to address pharmaceutical plastics.

Through this program, anyone in the U.S. can request a recycling bag from Cabinet Health, ship back their old, empty plastic pill bottles, and have them either recycled or upcycled into an evolving art sculpture.

Prior to our investment, Cabinet Health made a notable appearance on the popular TV show “Shark Tank,” where they secured an investment of $500,000 for a 2.5% equity stake in the company. This exposure has led to increased interest in their mission and
products, with various school groups, medical experts, and environmental specialists reaching out to contribute to their goals.

Cabinet Health’s products are currently available online through their official website, via online retailers such as Grove Collaborative and Amazon, and in-store in over 700 CVS locations nationwide. They are also planning more retail partnerships in 2023.

In conclusion, we believe Cabinet Health is a testament to the power of our investment algorithm in identifying promising companies that are not only financially viable but also contribute positively to society. We are excited about the future of Cabinet Health and look forward to sharing more updates with you.

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Want to be a part of D3VC? Then join our waitlist today. Our goal is to invest in 200 companies with the potential to scale just like Cabinet Health.

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

Investment Crowdfunding July Overview: Resilient U.S. Economy and Investment Crowdfunding Trends Amid Market Exuberance

In July, the U.S. economy showed resilience with a 2.4% annual growth rate, despite higher interest rates and a struggling housing market. The stock market ended the month positively, with major indexes logging robust gains, raising expectations for a soft-landing scenario for the economy. However, the investment crowdfunding sector saw a slowdown in July. Sherwood Neiss, Principal at Crowdfund Capital Advisors, noted, “The exuberance in the public markets, higher interest rate savings options, and summer holidays may have led to issuers postponing offers and investors diverting their funds. Despite this, the overall health of the investment crowdfunding industry remains strong, with year-to-date capital commitments surpassing those of the previous year.”

In the investment crowdfunding sector, July saw $33.7M in investments, down from $47.3M in June but up from $28M last July. Despite the month-over-month decrease, the total invested this year to date compared to last year is up from $291.6M to $298.1M, indicating that 2023 is still outpacing 2022. However, July was a poor month for new deals, with only 76, the lowest monthly amount since April 2020. Despite this, 88 deals closed in July, with a success rate of 78.4%.

There were 472 active deals at the end of July, down from 560 at the beginning of the month. The number of checks written matched what happened with capital deployed, dropping from 27.5K in June to 17.4K in July but increased from 16.9K in the prior year. Investors wrote average checks of around $2K, up from both June this year and June the prior

year. Sherwood Neiss highlighted that the deal flow has arguably never been better, with 1.6x more Post revenue issuers in July than their pre-revenue counterparts, and they out-raised their pre-revenue counterparts over 8 to 1, showing investor interest clearly in the post-revenue court.

Median valuation rose across the board in July forfunded deals, bouncing from $10M in June to $17.5M in July. Pre and post-revenue issuers and startup and established ones all saw valuations increase. Equity deals continued to increase the amounts they are raising, with the average equity deal closing on $562K in July, up from $400K in June and $271K in the prior period. Sherwood Neiss concluded that while a month doesn’t make a year, we look forward to August which has historically be one of the stronger months for the industry as people return from vacation and investors are back in front of their computers.”

 

Issuers/Deals

In July, the Regulation Crowdfunding industry experienced a notable decline in new offerings, with only 76 issuers coming to market, compared to 137 in June and 123 in May. This indicates a significant drop in activity for the mont

h and falls well below the 12-month average of around 127 new offerings.

Among the 76 issuers, approximately 64.5% were post-revenue companies, showing a slight increase from June’s 62.7%. This suggests a continuing trend of more established businesses seeking capital through Regulation Crowdfunding platforms.

As the Fall season historically tends to be the most popular period for fundraising and investment, we can expect the number of new offerings to rebound next month. This could potentially lead to a higher number of issuers looking to capitalize on the seasonal trend and seek funding through crowdfunding platforms.

 

Capital

In July, the total capital invested in the Regulation Crowdfunding industry declined to $33.7 million, showing a decrease from the recent months and falling below the 12-month average of $42.6 million. This indicates a downturn in investment activity during the month and could be a result of exuberance in public market investments, competition with higher yielding savings accounts, and summer holidays.

The number of deals closed in July was 88, and they collectively raised a total of $25.3 million. Of note, 45% of that was committed in the previous month, June.

A key highlight is the average check size, which stood at $1,959 in July. This figure exceeds the 12-month average of $1,896, indicating strong investor sentiment and a willingness to allocate larger amounts of capital per investment. This may be attributed to various factors, such as confidence in certain industries, economic conditions, or investor risk profiles.

 

Investors/Checks Written

In July, the number of investors making commitments in the Regulation Crowdfunding industry experienced a significant decline. A total of 17,411 investors participated, marking a substantial drop from the peak observed in April, where nearly 50,000 investors made commitments.

However, despite the sharp drop from April, there was a 2.8% increase in the number of investors making commitments in July compared to the same month in the previous year. This indicates that while the industry has seen a decline from the exceptional peak in April, there is still moderate growth in investor participation over a broader timeframe.

The current number of investors making commitments in July is slightly below the 12-month average of 24,505. This suggests that the industry is experiencing a temporary dip in investor activity. Additionally, the presence of an outlier in April may have skewed the average and contributed to the slight fall below the interquartile range.

Despite the decrease in overall capital invested, and as mentioned above, the average check size has shown a positive trend. In July, the average check size recovered to $1,959, which is much higher than the average of $1,367 observed in April. This suggests that individual investors are committing more significant amounts to each investment.

 

Valuations

In July, the Investment Crowdfunding industry experienced a significant surge in median valuations, reaching the highest point of the year. The median valuation increased by an impressive 75.5% compared to the previous month and grew by 1.8% since the last period.

Despite the increase in median valuations, the success rate of offerings that closed in July surprisingly exceeded the 12-month average. Approximately 78% of the offerings closed successfully during the month, compared to the 12-month average of 76.5%. This indicates a higher-than-normal rate of successful funding campaigns, even in the context of the increased valuation levels.

The combination of higher median valuations and a higher success rate may suggest a market where investors are willing to pay a premium for perceived high-quality investment opportunities.

Notably, the success rate of companies closing with a valuation of $15 million in July was particularly impressive, with 22 out of 23 companies successfully raising funds. This indicates a high level of investor interest and confidence in companies positioned at these higher valuation points.

Nonetheless, if the industry is focused on getting institutional capital participation, there needs to be some reckoning between what companies are worth and what investors should be paying.

In conclusion, July presented a mixed picture for the economy and the investment crowdfunding sector. While the U.S. economy demonstrated resilience and the stock market ended on a high note, the investment crowdfunding sector experienced a slowdown. However, despite the month-over-month decrease in investments and a dip in new deals, the sector’s year-to-date capital commitments surpassed those of the previous year. This indicates that the overall health of the investment crowdfunding industry remains strong, even amidst the challenges presented by market exuberance, higher interest rates, and seasonal factors.

Stay tuned to Crowdfund Capital Advisors for the latest updates and analysis on the ever-evolving world of Investment Crowdfunding.

 

How Does D3VC Apply AI to Identify Investment Opportunities?

Dear CCA Followers,

I’ve had the privilege of engaging in numerous calls and discussions with individuals over the past few weeks regarding D3VC. One recurring question that arises is, “What sets D3VC apart from other venture funds?” The answer lies, in part, in our utilization of AI and Machine Learning to expedite our deal sourcing and vetting processes. Naturally, this prompts the subsequent query, “How does the AI actually function?”

While I cannot divulge the extensive 18 months of effort dedicated to developing our algorithm, I can provide you with a high-level overview of our approach:

First and foremost, we leveraged AI and Machine Learning to construct a state-of-the-art algorithm. This algorithm serves as our guiding force when making investment decisions. To ensure its accuracy, we harnessed a unique dataset from CCA, containing over 150 data fields encompassing crucial information related to online investment opportunities. These fields encompass details about the companies seeking capital, their financials, historical performance, and funding rounds.

To empower our AI algorithm, we embarked on a meticulous process of labeling historical data from CCA. This enabled us to discern the defining characteristics of successful and failed ventures. By doing so, our algorithm became proficient at recognizing signals that forecast success or failure. To mitigate the risk of overfitting the algorithm to the training data, we conducted rigorous validation while fine-tuning the model. Subsequently, we subjected the AI model to independent holdout samples to evaluate its performance.

The regular validation of our AI algorithm is of paramount importance to us. We continually update it with fresh data to maintain consistent and stable performance. Moreover, we prioritize the regular rebuilding of the model to capture the latest patterns and assess the value of the latest AI technologies. Given the dynamic nature of economic and investment trends, it is crucial for our algorithm to adapt to these shifting dynamics. This involves appropriately weighing recent data against older data.

When evaluating a company, our AI algorithm conducts a comprehensive analysis by examining similar companies that have experienced either success or failure in the past. It compares the historical markers of these companies to the one under evaluation, determining whether they share similarities that indicate potential success or failure. This process allows us to extract predictive signals from the data, providing insights into the potential trajectory of the company.

It is essential to understand that our AI-driven process does not replace the expertise of our investment committee (IC). Rather, it accelerates the decision-making process by significantly reducing the number of companies that require exhaustive analysis. Our AI algorithm narrows down the diligence list from hundreds to a select few, allowing the IC to focus their valuable time and expertise more efficiently. On average, we review five companies each week and select two for investment, resulting in approximately 100 investments per year.

To create a well-diversified portfolio, our aim is to invest in around 200 companies during the capital deployment period of our fund. This level of diversification is critical due to the power-law distribution of venture returns. By spreading our investments across a broad range of opportunities, we achieve solid returns while effectively managing risk. This commitment to diversification sets us apart from other venture funds.

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.

Investment Crowdfunding Q2 2023 Roundup – Promising Growth and Shifts in Alternative Finance Landscape

Welcome to the Q2 edition of our Investment Crowdfunding Newsletter! In this month’s issue, we delve into the ongoing debate among experts about the possibility of a recession in the United States and its potential impact on equity crowdfunding. Despite concerns surrounding higher borrowing costs and interest rate hikes, the economy has shown resilience, with consumers continuing to spend and employers maintaining robust hiring trends. As we explore the results of Q2’s investment crowdfunding campaigns, we’ll analyze how these economic factors have influenced the landscape and contributed to the success stories within the crowdfunding realm.

According to a comprehensive analysis of offers, investments, and checks written data, Q2 2023 exhibited steady growth, albeit with a slight decrease in new deals compared to the previous quarter. The number of new deals stood at 355, indicating a consistent rise in opportunities. Total commitments from investments amounted to $151.7 million, with an impressive count of 99,388 investors.

Sherwood Neiss, Principal at CCA. said, “As we analyze the quarterly findings, we witness a resilient market showing steady growth in Q2 2023. While there may have been a slight dip in deal flow compared to the previous quarter, it is important to acknowledge the overall upward trend in offers, investments, and checks written. These findings reflect the ongoing strength and potential of the market, underpinning the positive outlook for investors and entrepreneurs alike.”

 

Issuers/Deals

  • In Q2, a remarkable 403 deals were closed, marking the second-highest number since the industry’s inception.
  • The number of new issuers declined compared to the previous quarter and year, yet still ranked as the 10th best quarter.
  • 3 out of 4 deals successfully met their minimum funding targets, a slight improvement from the previous quarter.
  • The average time on the market was 43 days, indicating favorable market dynamics.
  • The total number of deals surpassed 7,200, showcasing robust deal flow and sustained interest.
  • Post-revenue companies coming online outpaced pre-revenue ones at a ratio of 1.64 to 1, with significantly higher capital commitments flowing into the former.

Capital

  • Q2 2023 emerged as the second-best
  • investment quarter, with only $72 million away from breaking the $2 billion milestone.
  • Issuers experienced an upward trend in average raises, with debt raises witnessing a significant jump.
  • Notably, there were 45 deals surpassing the $1 million mark, a substantial increase from the previous quarter.

Investors/Checks Written

  • Investor sentiment remained robust as the number of checks written increased compared to the previous quarter.
  • Although check sizes decreased slightly from the previous quarter ($1,545 vs. $1,693), they have shown an overall upward trend.

Valuations

  • Established post-revenue issuers showcased steady median valuation growth, maintaining their high valuation range since the industry’s inception.
  • Conversely, post-revenue startups, pre-revenue established issuers, and pre-revenue startups experienced valuation drops, signaling potential market corrections.

Jobs/Economic Activity

  • The industry’s significant contribution to local economies was evident; new issuers in 210 cities accounted for the highest economic stimulus since the launch of the industry.
  • Job creation and support during the quarter increased to 27.6K, bringing the total jobs created/supported to 336K since the industry’s inception.

Platforms

  • Wefunder secured the top spot as the leading platform, raising an impressive $80.8 million through 316 new offers.
  • StartEngine and Republic followed, raising $28.4 million and $13.4 million, respectively, with a significant number of new offers.

Debt Deals:

  • The debt market experienced its most successful quarter to date, with 113 new offers, signaling a tightening commercial lending market.
  • Interest rates on debt offers increased to nearly 11%, reflecting the impact of the Federal Reserve’s interest rate hike.
  • Revenue Share, a popular debt security option, witnessed a surge in the number of issuers utilizing it, with an average revenue share of 1.6.

Women/Minorities:

  • In June, 30% of all deals had a women or minority founder, and all of those deals were successfully funded.
  • However, capital allocation to women and minority founders remained relatively low, representing only 5% of the total funds committed.
  • Notable variations were observed in the average funds raised, with minority women securing the highest average amount.

In summary, the findings from Q2 2023 affirm the resilience and evolution of the alternative finance landscape. Despite minor fluctuations in certain metrics, the industry continues to showcase growth, create jobs, and attract investor interest. It would appear that the overall economic resilience is showing up as positive investor sentiment when it comes to Investment Crowdfunding. Issuers need to be made aware and efforts to promote diversity and support underrepresented founders remain crucial for a more inclusive and thriving ecosystem.

D3VC Update – Fund Commitments and Media

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

Introducing D3VC

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:

  • Data-Driven Approach: Our proprietary dataset, comprising 150+ data points on over 6,000 offerings, fuels our AI-driven investment decisions. We leverage the power of data and cutting-edge machine learning algorithms to identify and evaluate the most promising startups raising capital through equity crowdfunding.
  • Experienced Leadership: Our team consists of financial and machine learning experts who bring a wealth of experience from leading institutions and startups. We combine industry knowledge with AI expertise to make informed investment choices and unlock the potential of early-stage ventures.
  • Simulated Returns: Backtested on historical data from 2016-2022, our algorithm has produced annualized returns surpassing the performance of traditional investment avenues. By focusing on early-stage equity crowdfunding opportunities, we aim to deliver higher returns through diversification.
  • Comprehensive Portfolio: With a target of 200-300 investments over 2 to 3 years, we provide investors with a diversified portfolio across the equity crowdfunding industry. Our approach allows you to participate in the growth of promising startups at their earliest stages, potentially capturing significant upside potential.

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.

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We asked ChatCPT to Create an Algorithm from our Data fields

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:

  1. Gather information about the business being offered for investment, including its incorporation date, location, sales, valuation compared to others in its 3-digit NAICS code, cash, accounts receivables, short-term debt, long-term debt, income, how much money they have raised to date and how many investors have participated.
  2. Calculate a score for each of these factors based on the following criteria:
  • Incorporation date: The longer the business has been incorporated, the higher the score. For example, a business that has been incorporated for over 5 years might receive a score of 5, while a business that has been incorporated for less than a year might receive a score of 1.
  • Location: The score for location will depend on factors such as the state’s tax policies, labor laws, and the state’s business-friendly index. For example, a business located in a state with low taxes, business-friendly policies and labor laws might receive a score of 5, while a business located in a state with high taxes, stringent labor laws and a low business-friendly index might receive a score of 1.
  • Sales: A business that has a high amount of sales will receive a higher score. For example, a business with over $1 million in sales might receive a score of 5, while a business with no sales might receive a score of 1.
  • Valuation compared to others in its 3-digit NAICS code: A business that has a fair valuation compared to others in its 3-digit NAICS code will receive a higher score. For example, a business that has a valuation within 10% of the median valuation for its 3-digit NAICS code might receive a score of 5, while a business that has a valuation that is more than 50% higher than the median valuation for its 3-digit NAICS code might receive a score of 1.
  • Funding amount and number of investors: A business that has raised a high amount of money and has a large number of investors will receive a higher score. For example, a business that has raised over $1 million and has over 50 investors might receive a score of 5, while a business that has raised less than $100,000 and has only a few investors might receive a score of 1.
  • Cash, accounts receivables, short-term debt, long-term debt, and income: Each of these factors will be evaluated individually and will receive a score based on the specific circumstances of the business. For example, a business with high cash reserves might receive a score of 5, while a business with a high amount of long-term debt might receive a score of 1.
  1. Calculate a weighted average score based on the importance of each factor to determine the overall score for the business. For example, the overall score might be calculated as follows:

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)

  1. Rank the business based on its overall score, with the highest-scoring businesses being rated as good and the lowest-scoring businesses being rated as bad. For example, businesses with an overall score of 4.5 or higher might be rated as good, while businesses with an overall score

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!

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Top 100 Cities in the United States for Investment Crowdfunding

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 Ranked #1 Online Investment Platform – Results Come out of 2022 Industry Report

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