Last week, Crowd Valley published the Crowdfunding Market Report for Q4 2013. One of the main trends that emerged in the last publication is that Private Equity Funds are starting to play a significant role in the crowdfunding ecosystem.
In fact, as the table below shows, compared to Q3 2013, when our data showed no demand for crowdfunding services coming from Private Equity Funds, the category now accounts for 3% of our randomly-selected sample.
This indicates that Private Equity Fund Managers are starting to see an opportunity in adopting securities crowdfunding processes for their businesses. What are the reasons for that?
One of the main motives is that securities crowdfunding allows for more efficiency in the back-office processes of Private Equity investing, making it look almost like a natural development of such kind of investing activity.
In fact, securities crowdfunding brings some interesting benefits to Private Equity Funds, for instance:
References
Image: Vinoth Chandar: https://bit.ly/p/dkbbGy
One of the main motives is that securities crowdfunding allows for more efficiency in the back-office processes of Private Equity investing, making it look almost like a natural development of such kind of investing activity.
In fact, securities crowdfunding brings some interesting benefits to Private Equity Funds, for instance:
- Facilitated sourcing of potential issuers. An online crowdfunding portal works a bit like a first selection barrier: it allows businesses looking for equity capital easily to find the information needed and to start the application process in a few steps, assuming that they meet the platforms’ requirements. This translates into less time spent by Private Equity Funds' teams looking for potential issuers and providing them with the information necessary to start the process.
- Enlarged investors base. One of the biggest advantages of equity crowdfunding is that it potentially brings equity investment to everyone (where the law permits it). By using an online funding portal, a Private Equity Fund is able to promote its investment opportunities to other investors than just its limited partners.
- Increased transparency. By bringing a relevant part of the investment process online, the Private Equity Fund increases the level of transparency of its operations which can eventually translate in a competitive advantage.
References
Image: Vinoth Chandar: https://bit.ly/p/dkbbGy
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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