"As we enter this next recession, we will see investment crowdfunding as an importing funding tool for local communities, not only in supporting local businesses and jobs but investing in local economies where our federal government can’t. We expect that while the recession will hamper the average check size, the industry will continue to scale as innovation expands, issuers turn to their customers as investors, and the demand for capital grows.” Sherwood Neiss, Principal CCA
While September lived up to its historical standing as the worst month of the year for public equities, the same cannot be said for investment crowdfunding which continues to grow despite what is typically a lull month. Rising inflation, high employment, and strong demand caused the public markets to recede. However, it appears that none of those had a negative effect on either the supply of investment crowdfunding capital or the demand for capital among issuers.
While Fall is usually the best time of the year for investment crowdfunding, typically, September trails August as back to school and work means investors are focused elsewhere. We see this in September’s results. While there was a 9% growth in investments over the prior period, there was an 18.3% decrease over August. September was the 9th strongest month for investment crowdfunding since the industry began. So, the supply of capital remains strong.
Over 27.8k investors participated in September. This was 20.7% greater than the prior period, yet 2.3% down from the prior month. On average, investors were writing smaller checks in September, which may reflect the overall capital markets sentiment.
Demand among issuers remains strong, with September having 150 new offerings. This was flat over the prior period and down 9% over August. That said, September still ties in for the 3rd highest number of new offerings. With the yearly average of new offerings per month at 133, September is still well above that, indicating demand for capital grows.
“During the Great Recession,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors, “We went to Washington, DC, with the framework for investment crowdfunding. We were marketing a pragmatic framework, built upon existing securities laws, that would enable capital formation while providing adequate investor protection. We feel the industry has proven it can accomplish this. Now, as we enter this next recession, we will see investment crowdfunding as an importing funding tool for local communities, not only in supporting local businesses and jobs but investing in local economies where our federal government can’t. We expect that while the recession will hamper the average check size, the industry will continue to scale as innovation expands, issuers turn to their customers as investors, and the demand for capital grows.”
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CrowdBookTM is a product of Crowdfund Capital Advisors, a financial technology company that provides the most comprehensive data on the investment crowdfunding market. We’re the official data provider to Bloomberg, D3VC, and Vectr – and financial institutions, family offices, hedge funds, venture capitalists, angel investors, financial service firms, regulators, NGOs, and multi-lateral organizations use our data to track the market, investor sentiment, valuations, fundraise, source opportunities and execute deals.