General StartEngine Index

Equity Crowdfunding Q4 2019 Review

January 29, 2020 5 min read

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Equity Crowdfunding Q4 2019 Review

The following data covers Regulation Crowdfunding raises between May 16, 2016, and December 31, 2019. Data is sourced from all publicly disclosed Form C filings with the SEC, as well as public websites.


Standard Analysis

In the first quarterly edition of the StartEngine Index, we take a look back at 2019. Last year, companies raised a total of $121.3M, a 62% increase over the amount raised in 2018 ($75.8M).

Since Regulation Crowdfunding began in May 2016, companies have raised a total of $282.6M.

In total, 702 Regulation Crowdfunding offerings launched in 2019. While this is less than 2018’s 732 launches, the higher total raise amount reveals the growing number of people investing in these offerings and suggests a rising quality in the companies raising capital through Reg CF.

As of December 31, 2019, there have been 2,099 Regulation Crowdfunding offerings.

Let’s take a closer look at what happened in the fourth quarter of 2019.

The Regulation Crowdfunding Platforms

Capital Raised via Reg CF in Q4 by Platform

In Q4, StartEngine raised the most capital, with $18.5M raised in Regulation Crowdfunding offerings. Republic followed with $13.4M, and Wefunder with $12.7M. In total, $59.1M was raised in the final quarter of 2019, nearly half of what was raised the entire year.

Industries That Raised Capital

Capital Raised in Q4 2019 via Reg CF by Industry

In Q4, Technology companies raised $15M, Food & Beverage $13M, and Media & Entertainment $3.3M.

States Using Regulation Crowdfunding

Capital Raised in Q4 via Reg CF by State

California raised the lion’s share in Q4, with $19.5M raised. New York followed with $10.2M, and Texas with $5.7M.

Historically, these three states have raised the most capital via Regulation Crowdfunding. To date, businesses in California have raised $91.9M, New York companies $32.8M, and those in Texas $30.3M.

The Counties Leveraging Reg CF

Capital Raised in Q4 via Reg CF by County

With California’s large raise amount as a state overall, it’s no surprise to see Los Angeles, San Francisco, and San Diego as three of the more active counties in Regulation Crowdfunding.

In Q4, companies in Los Angeles County raised the most capital, with $8.1M raised. New York County followed with $5.7M, and Harris County (Houston) raised $3.3M.

Q4’s Raises With the Most Momentum

10 Reg CF Campaigns that Raised the Most in Q4

10 different companies raised over $1M in Q4, and 9 of them reached the maximum funding limit of Regulation Crowdfunding, or $1.07M.

5 of the 10 largest raises were on StartEngine.

StartEngine In Q4

Capital Raised in Q4 on StartEngine by Company

In the final quarter of 2019, 5 different companies raised $1M on StartEngine. Those companies were Tap Systems, a wearable keyboard, Parallel Flight Technologies, heavy-payload-carrying drones, Hylete, an athletic apparel company, AquaVault, hotel travel safes, and TriplePulse, or TruBrain, a nootropics company.

Did You Know?

Regulation Crowdfunding Offerings by Security Type

Since Regulation Crowdfunding began, 29.7% of offerings have been common stock.

Conclusion

The last quarter of 2019 was the biggest quarter of all time for Regulation Crowdfunding in terms of the amount invested. The fact that nearly half of 2019’s investment dollars came in Q4 is significant and deserves a second mention.

This growth was spearheaded by StartEngine’s surge in Q4 and supported by high capital commitments from both Republic and Wefunder.

With 233 new launches in Q4, 71 in December alone, Regulation Crowdfunding has a strong pipeline of new investment offerings to fuel growth in Q1 of 2020.

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