Slower growth can be tackled by new forms of financing, such as crowdfunding
China is already the largest crowdfunding market in the world. In 2014 alone, $32 billion were raised via peer-to-peer lending in the country. And it’ll double this year. Earlier this month, Dalian Wanda Group raised more than $800 million in only one campaign, which shows just how big equity crowdfunding can grow.
The huge numbers only reveal how crowdfunding, particularly equity crowdfunding, can grow. Authorities all over the world are paying close attention to the phenomenon. New regulations are being considered so that crowdfunding can really become a reliable means of financing, providing fair rules that protect both the investor and the entrepreneur. Think about a trillion-dollar industry very soon. We’ll definitely get there.
China’s State Council is so convinced by the numbers that they released a statement where they consider crowdfunding as a key way of financing to maintain and even boost economic growth. And that comes in a great moment for them, as the giant faces an economic slowdown not seen in decades.
All those numbers and facts pose crowdfunding as a revolutionary and disruptive way of financing. And we are seeing only the beginning of equity crowdfunding, the sector of the industry that tends to grow more. In fact, crowdfunding may soon become a major source of financing for any project.
There are some trends that can be easily seen in China and other countries as well. The first industry to be impacted is that of venture capital for startups. There is a growing number of traditional companies migrating to crowdfunding platforms, raising funds along with hundreds of several smaller investors in each project. As of now, there is a mix between traditional angel investing and equity crowdfunding, an arrangement that works great by all parts involved: the angel investor, who can share risks with other smaller players; the smaller investors, who can count on the partnership of a professional investments company; and the entrepreneur, who can raise money more easily and faster than by other means.