General StartEngine Index

Equity Crowdfunding by the Numbers: August ’22

September 9, 2022 4 min read

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Equity Crowdfunding by the Numbers: August ’22

KingsCrowd* dropped the equity crowdfunding industry performance numbers for August this week, and raise activity rebounded across the board from July. Reg. CF commitments for the month clocked in at $32.1M (up MoM from $27.0M); meanwhile Reg. A+ commitments more than doubled from $10.3M to a whopping $23.3M.

That’s good news for all involved of course, but not to brag – StartEngine led the industry in both categories. With $11.5M in commitments for Reg. CF campaigns, we outraised the #2 platform by 25%. And at $10.4M for August, StartEngine’s Reg. A+ commitments accounted for close to half the industry total.

*Source = https://kingscrowd.com/markets/. Please note a KingsCrowd Edge Subscription is required to access this report. The report only includes platforms selected by KingsCrowd and excludes real estate- and collectibles-only platforms, as well as Reg. D offerings and all raises limited to accredited investors.

Top equity crowdfunding platforms by Reg. CF commitments in August:

StartEngine

$11.5M

Wefunder

$9.2M

Republic

$6.2M

Top equity crowdfunding platforms by Reg. A+ commitments in August:

StartEngine

$10.4M

Dalmore Group

$8.8M

Issuance

$1.6M

*Source = https://kingscrowd.com/markets/. Please note a KingsCrowd Edge Subscription is required to access this report.

StartEngine August Milestones:

Industries climbing the funding ladder in August:

The Real Estate & Construction Industry recorded massive fundraising gains in August. The combined Reg. CF and Reg. A+ funding totals were up over $14M YoY, beating July numbers by more than $13M as well. August also saw a continued strong performance from the Food & Beverage and SaaS Industries, up YoY by $4.8M and $2M respectively. Both industries topped the funding charts in July as well.

August winners by combined funding total of Reg. CF & Reg. A+:

Industry

August ’22

August ’21

Real Est. & Construction

$15.9M

$1.9M

Food & Beverage

$9.9M

$5.1M

SaaS

$4.7M

$2.7M

*Source = https://kingscrowd.com/markets/. Please note a KingsCrowd Edge Subscription is required to access this report.

Could Reg. CF Offer a Path Forward for Closing the Gender Funding Gap?

It’s no secret that for most of its history, startup fundraising has been a boys’ club. A quick glance at VC activity this year shows that companies led by women founders only comprise 6.8% of venture-backed deals, up slightly from 3.6% in 2008 when data is first available. The trend in VC funding levels paints a similarly slow-moving picture: so far this year, women-led companies account for just 1.9% of invested venture capital, a minuscule increase from 1.7% in 2008.

While the reasons for the funding gap may vary, the harm to investors and the greater economy is clear. Multiple studies from Harvard and McKinsey show that gender-diverse teams are less susceptible to groupthink and on the whole, are 15% more likely to financially outperform their industry averages. So when those companies don’t receive funding, we’re all the poorer for it.

Enter equity crowdfunding. By allowing companies to appeal directly to their customers and the general public, equity crowdfunding can remove many of the barriers to traditional funding sources (think access to select networks of top private investors). And with its relatively low regulatory hurdles regulation crowdfunding (Reg. CF) can be particularly welcoming for early-stage startups, who historically struggled to find funding elsewhere. Case in point: in the first half of 2022, women-led businesses accounted for 29% of Reg. CF deals and 22.3% of Reg. CF funding.

Though no silver bullet, a successful Reg. CF raise can help springboard companies into later funding rounds, like Series A, and even strengthen those businesses’ appeal to certain VCs. That means a strong representation of women-led businesses in Reg. CF deals this year could be a leading indicator of greater parity in subsequent funding rounds down the road.

Unquestionably there’s still a lot of ground to cover, but the Reg. CF numbers from the first six months of the year are a promising demonstration of equity crowdfunding’s role as a fundraising equalizer. After all, motivated founders of all stripes have the opportunity to raise through the crowd – and that benefits us all.

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Kevin O’Leary is a paid spokesperson for StartEngine. Read the 17(b) disclosure here.

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