Given we are based in Denver, we thought it would be interesting to cover the impact of investment crowdfunding on Colorado’s economy. Since the 2016 launch of this innovative capital-raising method, 252 issuers in Colorado have turned to investment crowdfunding, with an impressive 71.8% success rate. These businesses have collectively raised $55.1 million from nearly 55,000 investors, 80% of whom are likely Coloradans. These companies have a collective value of $1.78 billion, indicating the potential for tremendous wealth creation. This local involvement demonstrates the power of community-driven investment and highlights the strength of crowdfunding as a tool for economic empowerment.
Investment crowdfunding, a financial model that allows companies to raise up to $5 million annually from the public through online platforms, has been transforming how businesses access capital. What makes this model so impactful is its inclusivity—anyone can invest, which democratizes access to both funding for businesses and investment opportunities for individuals. This movement is sweeping the nation, with Colorado emerging as a leader in this space. Sherwood Neiss, Principal at Crowdfund Capital Advisors, emphasizes: “Investment crowdfunding is more than just a funding mechanism. It’s a powerful tool that connects local businesses with the communities they serve, allowing everyday people to become stakeholders in the economic future of their region.”
Colorado’s diverse industries have been major beneficiaries. The top sectors utilizing crowdfunding include healthcare, food services, and technology. Denver leads the way with 62 deals, raising over $164 million from 23,000 investors. Prominent companies such as McSquares, which raised $1.43 million from 2,587 investors, and Colorado Sake Co., which raised $728,395 from 754 investors, exemplify how local businesses can thrive through crowdfunding. Boulder follows closely with 31 deals, raising $11 million. The successful companies in Boulder include HobbyDB, which raised over $1.5 million from 3,623 investors.
Interestingly, according to the Crowdfunding Genome, a tool that ranks cities based on their investment crowdfunding activity and performance, Denver/Boulder ranks 20th in the nation. This indicates that while the region is making strides, there is still room for improvement. Cities with higher rankings have typically seen more deal flow, greater diversity in industries, and stronger investor engagement. Enhancing Denver and Boulder’s crowdfunding ecosystem could help propel these cities into the top 10, driving even more economic growth.
Beyond the capital raised, the economic ripple effects of investment crowdfunding are substantial. Colorado businesses that raised funds through this method have contributed an estimated half a billion to the state’s economy, spending that largely flows back to other local companies providing goods and services. This creates a sustainable cycle of growth and development within the state.
Moreover, investment crowdfunding promotes inclusivity, with 17.1% of all Colorado issuers having a women or minority founder. This helps diversify the entrepreneurial landscape, offering opportunities to historically underrepresented groups.
As crowdfunding continues to grow, Colorado is poised to benefit further. This model empowers individuals to invest in businesses they believe in, fostering stronger ties between companies and their communities. The state’s economic future is being shaped not only by the businesses that innovate but also by the residents who choose to invest in them. In the words of Sherwood Neiss, “The future of local economic development is being driven by those who see the potential in their neighbors’ businesses and choose to invest in their success.”
