In the early days of investment crowdfunding, many individuals assumed that most capital raised would go mainly to seed funding rounds. Startups that have a choice to bootstrap or raise equity capital from angel investors or risk taking VCs. But today, this is not the case as online capital formation is agnostic to stage of a company. Some regulators took a misguided approach by attempting to constrain amounts raised instead of recognizing the innovation is in the platform and the opportunity is intrinsic to both investors and securities issuers. Why slam an arbitrary cap on funding amounts?
Seedrs, one of the leading equity crowdfunding platforms in the UK, has helped to fund a spectrum of companies from various stages. From seed rounds to listed companies – each can avail themselves of selling securities online. In fact the average crowdfunding round over £1 million now stands at £2.2 million (USD$ 3M+). This average amount will continue to move higher.
Did you know? The average £1m+ crowdfunding campaign on Seedrs is £2.2m. Compared to only £1.5m on the nearest competitor. Learn more here https://t.co/l2mDBr65I2 #startupfunding
— Seedrs (@Seedrs) March 12, 2018
There is a speed bump for issuers seeking EUR 5 million or more. An issuer must produce a prospectus which is a cumbersome task. Not insurmountable but quite a bit of work. Europe is expected to push this amount higher to EUR 8 million this coming summer, thus empowering innovative crowdfunding platforms to assist later stage firms. All sides of the equation will benefit: Issuer, investor, and platform. This is a natural process and helpful to the economy. The sooner funding caps are raised everywhere, the better.