20 Facts About Equity crowdfunding

Equity crowdfunding is the online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets.

Equity crowdfunding is referred to as crowdinvesting, investment crowdfunding, or crowd equity.

Equity crowdfunding is a mechanism that enables broad groups of investors to fund startup companies and small businesses in return for equity.

Investment crowdfunding can be debt-based or equity-based, or can follow other models, including profit-sharing and hybrid models.

The term equity crowdfunding is often used to describe crowdinvesting into both debt and equity based instruments when they are offered on an equity crowdfunding platform.

Related searches

Debt Equity crowdfunding, known as peer to peer lending or peer to business lending, allows a group of lenders to lend funds to individuals or businesses in return for interest payment on top of capital repayments.

Creators on Equity crowdfunding platforms are often inexperienced and lack the ability to complete funded projects by agreed deadlines.

Local Equity crowdfunding sites have been active in Belgium since 2011, and the legislation was adapted to cover them in April 2014.

Canada's first equity crowdfunding portal is Optimize Capital Markets which launched in Ontario in September 2009.

The legal issues around donation-based Equity crowdfunding have been under debate in Finland as its legislation around this is different from most countries.

However the legislation about Equity and Rewards-based Crowdfunding is more similar to the rest of Europe, and the legal situation is clear.

The largest Equity crowdfunding project was launched by the company Brainpool in December 2011.

Therefore, any equity crowdfunding activity is currently regulated under the Israeli Securities Law which permits the offering of securities to 35 non accredited individuals and an unlimited amount of accredited investors as defined in Israel Securities Law.

The first equity crowdfunding campaign launched in Italy was a success, raising a total of €157,780 in three months, exceeding its initial target of €147,000.

PledgeMe and Snowball Effect were the first two platforms to receive licences Snowball Effect launched New Zealand's first equity crowdfunding offer in August 2014, with craft brewery Renaissance Brewing successfully raising $700,000 in 13 days.

In October 2015, the Financial Markets Authority licensed a new equity crowdfunding portal called AlphaCrowd that said it would focus only on digital and technology companies and would aim to attract Chinese investors to New Zealand.

The donation-based CrowdFunding portal FundedByMe has been active in Sweden and Norway since 2011, and Swedish crowdfunding activity is evolving in parallel to Crowdfunding in the US with Equity-Based CrowdFunding becoming active in Sweden late in 2012.

In May 2014, Crowd for Angels, which is considered the first debt and equity crowdfunding platform authorised by the Financial Conduct Authority, launched.

Notable platforms for accredited crowdfunding include Wefunder, AngelList, EquityNet, CircleUp, SeedInvest, and EnergyFunders.

In July 2012, the Wisconsin Department of Financial Institutions issued an advisory, about legislation proposed, intended to allow Equity crowdfunding to raise up to $1 million from non-accredited Wisconsin investors without audited financial statements, or up to $2 million if the issuer has audited financial statements.