Regulation Crowdfunding from May, 2016 – Feb. 2021
- Over 3,600 securities offerings have been filed with the SEC by over 3,100 issuers (more issuers than are on the New York Stock Exchange)
- These issuers have
- Had over $900M in commitments
- 5% of offerings have been successful. Campaigns that were not only accounted for 4.6% of capital commitments
- Supported over 110,000 jobs
- Represent $17.3B in market value
- Represent over 450 industries, from 1,100 towns in the United States.
- Had over $900M in commitments
Regulation Changes on March 15, 2021
| Before | As Of March 15, 2021 | What it Means | |
| Maximum Raise | $1.07M | $5M | Small issuers can now successfully complete a full Series A offering online broadening access to capital to potentially thousands of enterprises that do not have access to Silicon Valley |
| Investment Caps (Retail Investors) | Individuals may make investments based on the lower of their annual earnings or net worth
|
Individuals may make investments based on the higher of their annual earnings or net worth
|
More retail investors can diversify into local startups and small businesses they believe in with slightly larger amounts. Moving the current average investment from $750 to $1,500 |
| Investment Caps (Accredited Investors) | Individuals may make investments based on the lower of their annual earnings or net worth | No caps | More accredited investors who already invest into startups and SMEs will be able to do so with larger checks. This will promote lead investors within offerings and mitigate risk for retail investors given the higher scrutiny provided by accredited investors |
| Testing the waters | No | Yes | Issuers can see if there is an appetite for their offering before a complete filing. This will provide efficiencies and reduce legal, accounting and offering expenses |
| Demo Day Pitches | No | Yes | Issuers can pitch their offering without worrying about overstepping prohibitions on general solicitation |
| Pooling of Investors into a Special Purpose Vehicle (SPV) – Ability to “crowdfund a fund” | No | Yes | Streamlines the investor communication process such that issuers can communicate with a point-person for the SPV. Investors still maintain their ownership percentages and voting rights. |
Expectations for the Next 12 Months
- Over $1.2B will be invested
- The number of offerings to increase 40% to 1,700
- The number of investors to double to 800,000
