StartEngine Index

Equity Crowdfunding Q1 2020 Review

April 18, 2020 5 min read

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Equity Crowdfunding Q1 2020 Review

The following data covers Regulation Crowdfunding raises between May 16, 2016, and March 31, 2020. Data is sourced from all publicly disclosed Form C filings with the SEC, as well as public websites.


Standard Analysis

In the first quarter of 2020, companies raised $33.3M via Regulation Crowdfunding, bringing the all-time total raised via Reg CF to $314.9M.

223 companies launched Reg CF offerings in Q1, close to the 233 offerings launched in the final quarter of 2019. Since Regulation Crowdfunding began, there have been 2,322 offerings from companies all over the US.

Industries That Raised Capital

Capital Raised in Q1 Via Reg CF by Industry

In Q1 2020, Technology companies raised $7M, Food & Beverage $5.2M, and Media & Entertainment $2.6M.

States Using Regulation Crowdfunding

Capital Raised in Q1 via Reg CF by State

To date, companies in 49 states have raised capital via equity crowdfunding (Kansas is the one exception), but California has attracted the most capital. To date, California companies have raised $104.9M via Regulation Crowdfunding, and the state’s funding success has not changed in the first quarter of 2020.

In Q1 California raised $13.4M, New York $5.4M, and New Jersey $2M.

The Counties Leveraging Reg CF

Capital Raised in Q1 via Reg CF by County

In Q1, companies in Los Angeles County (the home of StartEngine) raised the most capital, with $5.1M raised. San Diego County followed with $2.9M, and New York with $2M.

Q1’s Raises With the Most Momentum

Companies That Reached The Reg CF Maximum in Q1

18 different companies reached the maximum funding limit of Regulation Crowdfunding, or $1.07M.

8 of those maxed-out raises were on StartEngine.

Note: some companies are listed as having raised less than the $1.07M amount, and that is due to payment failure in some investments after the offering becomes oversubscribed.

StartEngine In Q1

Capital Raised on StartEngine in Q1 by Company

StartEngine kicked off 2020 with a bang. LiquidPiston, a company reimagining the combustion engine, raised $1.07M in just 9 hours on January 3rd. Other raises that had a lot of momentum in the first quarter of the year included Called Higher Studios, a faith-based movie studio, and Tall Idea Labs, or “Commerce.AI”, an AI-powered ecommerce software company.

Did You Know?

Reg CF Offerings by Gender

26.7% of Regulation Crowdfunding offerings to date have a female (co)founder.

Analysis

While the historical data around gender parity among the founders of Regulation Crowdfunding offerings is 26.7% of offerings have a female (co)founder, we did see an increase in the number of female founders in the first quarter of 2020. 34% of offerings (76 companies) launched in Q1 listed a female founder or co-founder on their team, nearly an 8% difference when compared to the historical figure.

Looking to the future, Los Angeles County launched the most offerings this quarter, with 16 new offerings, followed by New York County, which launched 15 new offerings. These two counties have raised the most capital via Regulation Crowdfunding to date ($35.3M and $20M respectively), and with these new launches, both counties are positioned to maintain their spots in the coming months.

Of the new offerings so far this year, 34 businesses operate in the Food & Beverage industry, the highest number of new offerings in a single industry. Hospitality companies launched the second most offerings, with 27 new campaigns. Given the struggles that both industries are going through today with COVID-19, now is a better time than ever to support the small businesses in those industries who need your investment to survive.

Stay safe, and we’ll be back with the Q2 Index in early July.

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