Crowdfunding is on the rise with an estimated 50,000 business angels registered on equity financing sites such as AngelList, CircleUp, Seedrs, and Crowdcube. About ten percent of those registered have actually taken the plunge and completed transactions, says a new report from OurCrowd. OurCrowd, which authored and researched the report, claims to be one of the market leaders in this emerging segment.
The analysis shows that equity crowdfunding platforms used by individuals to become equity stakeholders in early stage companies have grown in order to meet the needs of startups and small investors who can now participate in a more liberated market in the US.
It is worth noting that the UK is home to twice as many platforms as the US, despite its smaller population and GDP. One reason the UK may be ahead of the US is that its regulatory body has been quick to create a policy and an approval process for innovative financial technologies, including peer to peer lending and various types of crowdfinancing. Seedrs and Crowdcube, which figure prominently in the report, both have FCA certification.
Elsewhere, Crowdfundinsider considered other reasons why Great Britain leads the way, noting that leading UK platforms are actively involved in ensuring quality and safer investing support and the fact that secondary deals, as well as fund pools are also possible on the platforms.
The UK’s FCA defines crowdfunding as an online platform where consumers can buy investments, such as equity or debt securities that are not listed or traded on a recognized exchange, or units in an unregulated collective investment scheme. (Image source: OurCrowd)