Crowdfunding used by people who couldn’t get conventional financing, is going mainstream. The Crowdfunding business is growing at an unparalleled rate and affecting business innovation, changing the role of fiscal institutions, and affecting government policies. That explosive increase has led to entrepreneurs and startup execs racing to stay informed of the changes. We’ll look at just what the future holds for Crowdfunding today.
Crowdfunding marketplace will grow hugely
Only six years past crowdfunding reported $880 million in 2010, revealing a relatively small marketplace with growth possibility that was minimal. According to crowdfunding research business Massolution, the industry raised more than double and reached to $34.4 billion in 2015. We’ll find $90 billion by 2017 if this trend of doubling continues.
Increase in amount of crowdfunding platforms
Internationally, there were over 700 crowdfunding platforms in 2012. Of this number, spell 191 platforms were established in the US that year. As of December 2014, the crowdfunding sector had over 1250 stages whereby issuers and investors interacted. Whether this trend goes on, the world will boast of over 2000 crowdfunding platforms by the end of this year.
By the end of 2016 the crowdfunding business expected to account for more capital than VC, based on a report by Massolution.
In comparison, the venture capital industry invests a mean of about $30 billion each year. Meanwhile, the market value of crowdfunding business is doubling annually, and is spread across many kinds of funding models like benefits, equity, donation, and debt. The industry will overtake venture capital in the event the crowdfunding growth continues.
New funding models will emerge
The five most common crowdfunding models out there are donation-based crowdfunding, reward-based crowdfunding, pre-sales based crowdfunding, lending-based investment and crowdfunding -based crowdfunding. Nowadays, new crowdfunding “ funds are coming up to provide investors the chance to back types of jobs rather than homing in on particular efforts. The Crowdcube Venture Fund, which Braveheart claims is the first of its type, enables investors to create a portfolio of investments by co-investing in specific enterprises that have successfully financed on Crowdcube.
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