The crowdfunding industry has been growing fast during the last couple of years. In 2012, Massolution estimated a total value of €2.7 billion for the global crowdfunding market, with around $1.6 billion coming from the USA and $945 million from Europe. Asia, instead, was responsible for slightly more than 1% of the total value.
A Growing Industry
The crowdfunding industry has been growing fast during the last couple of years. In 2012, Massolution estimated a total value of €2.7 billion for the global crowdfunding market, with around $1.6 billion coming from the USA and $945 million from Europe. Asia, instead, was responsible for slightly more than 1% of the total value. In the past five-to-six years, crowdfunding has undergone impressive growth, finding several new applications and evolving into several forms. In particular, we have seen the birth of securities crowdfunding, that is online investing into securities, like debt or equity. This new financing method is getting more and more attention from national regulators and traditional financial sector actors – e.g. broker-dealers, investment banks, private equity funds, etc. – that see it as an innovation, bringing along more transparency and efficiency, that is here to stay. Crowd Valley COO, Paul Higgins participated as the keynote speaker in New Zealand’s first ever full-day event dedicated to crowdfunding, the Pacific Crowdfunding Symposium. Paul explained some of the company’s recent findings in its Global Crowdfunding Market Report to give some context and insight into the regulatory trends and best practices that we have seen, for example, in the US, France, and Italy. Venture Camp 2013 is a two-day conference organized by Mind The Bridge, a Silicon Valley foundation for entrepreneurship education and worldwide talent scouting. The conference held in Milan, Italy, hosted a select and restricted audience, mainly composed of angel investors, corporate executives and entrepreneurs. The aim of Venture Camp was to inspire the audience by providing an overview on the main trends and best practices in the early-stage finance market and by having several international investors and entrepreneurs sharing their experiences. “The Stoneage didn’t end because we ran out of stones” Al Gore The Oxford English Dictionary defines crowdfunding as “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet”. The crowdfunding industry is evolving and rapidly dispersing across many areas of finance, and institutional investors starting to enter the market. (That actually resulted in the adoption of the term “institutional crowdfunding”). The SEC has released a set of proposed rules for implementation of Title III of the JOBS Act, FINRA has released proposed forms and rules for the required registration by funding portals and new rules on general solicitation and general advertising have been put into effect. But where does that leave the market now? Despite the proposals, the Title III crowdfunding market is not open and won’t be for another few months. Furthermore, questions remain as to how navigable that market will be for newcomers and how profitable it will be in the short to medium term. On the 17th of October, Crowd Valley Chairman Jouko Ahvenainen took part to the Crowdfunding Academic Symposium in UC Berkeley. During that occasion Jouko also presented Crowd Valley Global Crowdfunding Market Report, which provides an overview on the international crowdfunding sector as seen by the company.
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