The following data covers Regulation Crowdfunding raises between May 16, 2016, and July 31, 2017. Data is sourced from all publicly disclosed Form C filings with the SEC.
Index: 523
The index has increased by 11.3% this month. Read up on last month’s Index here. Cheers to growth!
Total Capital Raised
Across all platforms, companies have raised nearly $52M through Reg CF.
Type of Securities Offered
The big three still reign supreme: Common Stock, SAFE Notes, and Debt.
Since June, there has been a 5% increase in the overall market share for SAFEs—this, even though SAFEs have come under recent scrutiny by the SEC.Still, SAFE shares the majority market share with Common Stock, each accounting for ~28% of the market. Debt offerings also saw a strong increase from 20% last month to 26% this month.
Less common types of securities like Revenue Sharing, Convertible Note, and Preferred Stock account for the rest of the market.
Type of Company
This month we began tracking the types of companies registered with the SEC. A large majority are corporations at 68.4%, with 28.5% as LLCs.
It’s interesting to see Public Benefit Corporations represent 2.1% of the total. These corporations use state laws to allow the management to control the company for benefits other than shareholder wealth creation.
Number of Raises Per Portal
This month we started tracking the number of specific raises per portal. Wefunder accounts for 105 campaigns in Regulation Crowdfunding; StartEngine follows at 50; SeedInvest rounds out the top three with 23 campaigns.
Average Company Makeup
The average company had 5 employees (15% less than last month) and is 3 years old. The average company had under $400K in assets, under $70K in cash, and an average of just under $300K in revenue.
The average company is not profitable with an average $210K in losses in 2016. These profit numbers are around 20% lower than last month, likely due to smaller companies joining the ranks in the last 30 days.
In some ways, this could could indicate a trend of earlier startups utilizing Regulation Crowdfunding. Smaller companies have the hardest time raising capital because venture capitalist and angel investors typically want to see strong progress prior to investing. The crowd can break down that barrier.
State of Operation
It’s still California, but the tides are shifting.
Over 39% of the companies who have raised capital since inception are from California. This is decrease from last month as more companies in other states are raising capital under Regulation Crowdfunding. The next most popular is Texas with 8.8%, followed by New York 6.7%.
Can you think of an issuer from your home state who has raised capital from the crowd? Might be worth Googling. We are seeing companies across the U.S. taking advantage of this regulation.
County of Operation
This month, the county with the most raised from Regulation Crowdfunding since inception is Los Angeles County with $5.9M by 33 companies, a sharp increase from last month’s $3.8M.
This means LA took over the top spot from San Diego County which is now in fifth place. In second place is Alameda County (East Bay) with $4.3M raised followed by Travis Texas (Austin) at a little over $4M raised.
