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A New Generation of Angel Investor

A new generation of angel investors

Five years ago you needed to be a wealthy “accredited investor” to be an angel investor (in most cases). Startup deals were very secretive, and you usually had to know someone to get access to quality opportunities. 

That all changed from 2015 to 2016, when two new forms of regulated startup investing went into effect (Regulation A+ and Regulation Crowdfunding). Suddenly everyone had the opportunity to become an angel investor and participate in private market deals.

Since then, regulated startup investing has grown steadily, and now appears to be accelerating. A new detailed report by Crowdfund Capital Advisors (CCA) highlights this growth, key statistics, and shows how these new forms of capital formation are helping new businesses in nearly every part of America raise money.

Here are a few of our takeaways from CCA’s report.

  • 2,675 companies have conducted 3,089 offerings

  • Companies who did a 2nd round of funding had an average revenue increase of 23% 

  • $500 million of capital has been committed through these offering types to date

  • 700,000 investors have participated

  • Average of $342,000 raised per successful offering

  • Companies from 850 cities have raised capital

  • Capital raised has supported an estimated 100,000 jobs

  • The SEC and CCA have each identified zero securities fraud in these offerings

To sum it up: $500 million raised for 2,600 companies in 850 cities, from 700k investors with no fraud reported. Now that’s inspiring! All over the U.S., startup companies are raising money from thousands of individual investors, creating jobs and value.

One of the most interesting aspects of the CCA report is that since the COVID-19 crisis, startup investing on platforms like Republic has accelerated. In February, pre-crisis, the total amount raised was $9 million. By August, the monthly amount raised had increased to $25 million. And between July and August combined, the CCA report notes that $48 million was raised. That’s more in two months than the total from the first two years of Reg CF investing (2016-2017).

Regulated startup investing is booming. This difficult business environment seems to have encouraged companies to seek out funding alternatives, and many are choosing to sell equity via a crowd offering. For many companies, this is proving to be a better option than taking out a high interest line of credit, where APRs range from 24-99%.

700,000 new angel investors

Most relevant to all of you, a new generation of angel investors is being born. If you’re reading this, you’re probably a part of it and we’re thrilled to have you here in this important movement.

If you haven’t made an investment yet on Republic, now is the perfect time to get started and invest in 18.21! To learn more, please click here.

 

(Content via Republic)

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