10 Equity Crowdfunding Statistics that Should Have Your Attention
Here are some key measures of the crowdfunding industry's growth.
If you’re an investor, you’ve probably read about the growth of equity crowdfunding over the past three years. You may have even invested in a deal on an equity crowdfunding platform. If you operate a crowdfunding portal, you’re probably more intimately familiar with how crowdfunding is becoming a serious investment option for millions of Americans. Even you, though, may be surprised at what’s on the horizon for the industry. The CFX team has put together this infographic highlighting 10 equity crowdfunding statistics that should have your attention. Let’s take a look at the stats.
- In 2015, equity crowdfunding portals will raise $34.4 billion. This is over 12 times the amount raised in 2012.
- The crowdfunding industry is projected to grow to over $300 billion by 2025.
- Title III and Regulation A+, the SEC’s new crowdfunding rules, will drastically expand the number of investors eligible to participate in equity crowdfunding offerings. The pool of eligible investors will expand from the roughly 8.5 million accredited investors in the United States to the entire U.S. population of 230 million.
- While the pool of eligible investors will expand, the average (mean) 401k balance in the United States is only $101,650, making liquidity crucial for retail investors.
- The total size of the U.S. commercial real estate market is $7 trillion. Crowdfunding makes up only $2.5 billion of this market, indicating much room for growth.
- 62% of self-directed IRA investors report that they either plan to or already have increased their allocation of non-traded alternatives in response to market volatility.
- Alternative assets are projected to account for over 26% of total institutional portfolios by the end of 2016.
- Between 1980 and 2000, an average of 311 firms went public every year. From 2001 to 2011, this number fell to an average of 99 IPOs per year.
- In the developing world, an estimated 344 million households, using savings, would be able to deploy $96 billion each year by 2025 in small crowdfunded investments in community businesses.
- Investors in technology startups currently have to hold their position in any one investment for an average of seven years.
So what’s the upshot of all these statistics? It’s simple. Crowdfunding is moving from a niche investment product to a legitimate investment option for millions of Americans. These new investors will benefit the most from having the option of liquidity. Interest in alternative assets is also increasing, at the same time that more and more growth stage companies are eschewing the public markets. These are interesting times for investors and issuers, and we at CFX are excited to be the first and only secondary market for crowdfunding platforms.