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May 13, 2015 11:00 AM ET

Archived: Has crowdfunding been invented yet?

iCrowdNewswire - May 13, 2015

 by Hector Botero, iCrowdNewswire, President & CEO

“Securities-based crowdfunding space has not lost any of its luster in the first quarter of 2015” according to Crowdnetic’s March 31st, 2015 report. “Total recorded capital commitments rising to $649 million from $482 in the previous quarter”. This is great news but it is important to keep in mind these figures are indicators only since Crowdnetic only monitors a small number of crowdfunding platforms. In other words, the total industry statistics is very different. And I say this with enthusiasm since according to what we see, it reflects continued overall growth, large CAGR – and we like large CAGR. Sectors may be different and sentiment may be swaying in different verticals – but overall, if I had to guesstimate the growth is actually larger. Much larger.

The top 10 Industry verticals by number of offerings as reported by Crowdnetic were Social Media, E-Commerce, App Software, Real Estate Development, Education K- 12, Digital Media/New Media, Specialty Retail, Online & Mobile Gaming, Real Estate Investments and Entertainment.  The top 10 Industries by average recorded capital commitments per successful offering were Long-Term Care Facilities, Elder Care. Green Construction, Venture Capital, Data Storage Devices, Green Building Materials, Oil and Gas Production & Pipelines, Credit Services, Organic Food & Beverages and Security & Protection Services.

In simple terms, the majority of offerings were in technology and the largest capital commitments in brick and mortar. To me this looks like a pretty perfect world, a fast moving and growing tech sector sprouting offerings and opportunities faster than any other and capital commitments flowing into brick and mortar investments. Maybe crowdfunding was really invented and created by financial advisors after all – risk and rewards combined with returns and security?

But the one thing I keep having to remind myself of is “stage”. This is the very early stage, a nascent event. The 2013 Jobs ACT started all of this, or at least started to formalize crowdfunding in the US since statistics show that in 2012 over one million crowdfunding campaigns raised $2.7 billion globally. And actually the United Kingdom appears to be the most advanced country regarding legislation and adoption of crowdfunding. My point with the nascent stage is that the entire process is behaving like a much more mature trend, than a legislation and opportunity driven market change. And that is great news. Really great news for those of us in the industry. We want to see a growing industry, properly regulated, widely adopted, organized and successfully changing outdated and growth impairing ways of doing business.

And at the end of the day what really brings about substantially change? Need and opportunity. The dot com bubble burst and lots of dreams were crushed but not a single person on the earth today would deny the sea change that technology has had on our lives. This past Saturday I listened closely as the University of Arizona Thunderbird School of Management held its commencement ceremony: the grandmaster told the audience that the “technologies that would define their lives have not yet been invented”. Imagine that, a graduation of the elite of elite, moving forward to a world were what will define their professional lives has not yet been invented. How grand is that?

When the graduation was over I went back to what I do for a living with a very large smile on my face because I now know for sure that crowdfunding has not been defined. Maybe not even invented yet.

Via iCrowdNewswire
Tags: , Blog
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