Five years ago you needed to be a wealthy “accredited investor” to be an angel investor (in most cases). Startup deals were very secretive, and you usually had to know someone to get access to quality opportunities.
That all changed from 2015 to 2016, when two new forms of regulated startup investing went into effect (Regulation A+ and Regulation Crowdfunding). Suddenly everyone had the opportunity to become an angel investor and participate in private market deals.
Since then, regulated startup investing has grown steadily, and now appears to be accelerating. A new detailed report by Crowdfund Capital Advisors (CCA) highlights this growth, key statistics, and shows how these new forms of capital formation are helping new businesses in nearly every part of America raise money.
Here are a few of our takeaways from CCA’s report.
2,675 companies have conducted 3,089 offerings
Companies who did a 2nd round of funding had an average revenue increase of 23%
$500 million of capital has been committed through these offering types to date
700,000 investors have participated
Average of $342,000 raised per successful offering
Companies from 850 cities have raised capital
Capital raised has supported an estimated 100,000 jobs
The SEC and CCA have each identified zero securities fraud in these offerings
To sum it up: $500 million raised for 2,600 companies in 850 cities, from 700k investors with no fraud reported. Now that’s inspiring! All over the U.S., startup companies are raising money from thousands of individual investors, creating jobs and value.
One of the most interesting aspects of the CCA report is that since the COVID-19 crisis, startup investing on platforms like Republic has accelerated. In February, pre-crisis, the total amount raised was $9 million. By August, the monthly amount raised had increased to $25 million. And between July and August combined, the CCA report notes that $48 million was raised. That’s more in two months than the total from the first two years of Reg CF investing (2016-2017).
Regulated startup investing is booming. This difficult business environment seems to have encouraged companies to seek out funding alternatives, and many are choosing to sell equity via a crowd offering. For many companies, this is proving to be a better option than taking out a high interest line of credit, where APRs range from 24-99%.
700,000 new angel investors
Most relevant to all of you, a new generation of angel investors is being born. If you’re reading this, you’re probably a part of it. You might have joined Republic to support a business you believe in, or simply to find promising early-stage opportunities. Either way, we’re thrilled to have you here in this important movement.
Today Republic has a vibrant community of 700,000 members. Our investors are asking great questions to founders in the discussion section. They’re screening deals for traction, and looking for promising teams and products. Many are also helping their portfolio companies succeed, by doing things like sharing their posts on social media, making introductions, and providing valuable feedback.
If you haven’t made an investment yet on Republic, now is the perfect time to get started. We currently have 56 live deals with minimum investments ranging from $50-100. All deals are vetted by our team of experts, and provide detailed information on their progress, team, and product on each deal page.
Here are a few of the industries represented on Republic currently.
This educational article is provided by Republic to help its users understand this area of the market, it should not be construed as investment advice as it is impersonal, disinterested and was produced by Republic for Republic’s users, without remuneration received or expected.