The crowdfunded securities of yesterday were rife with illiquidity. Today, secondary markets for crowdfunded securities have emerged and continue to grow.
There is considerable potential in equity crowdfunding, but all investors should be aware of the advantages and disadvantages to such investing.
Equity crowdfunding has changed in notable ways since its introduction in 2012, and is now primed to revolutionize how we finance companies and investments.
Thanks to equity crowdfunding, all Americans, not just the wealthy few, can invest in startups and small businesses via the internet.
The JOBS Act of 2012 opened the door for crowdfunding, which allows companies to collect small contributions to finance or capitalize a popular enterprise.
Want to start crowdfinancing? Creating a well-known, reliable and consistent brand is what makes investors want to give you their hard-earned money.
Thanks to Title III of the JOBS Act, for the first time in history, creators can let fans in and literally own a piece of the successful projects. True equity crowdfunding for all investors, regardless of income or net worth, was authorized by Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012.
My point here is simple: when stupid idea after stupid idea attracts investors, it’s a forward indication that a market is too frothy. When a market sees repeated examples of industry participants making things up, it’s a forward indication that a market has become dangerous.
Observations about the Title III (Regulation CF) crowdfunding market, 10 weeks into the launch of this new asset class:
Stratifund currently rates fifty Title III (Regulation CF) offerings and five Title IV (Regulation A+) offerings. Both exemptions, derived from the Jumpstart Our Business Startups Act of 2012, allow all investors, non-accredited as well as accredited, to participate. Stratifund uses a proprietary algorithm, based on five broad criteria, to rate offerings on a scale of 0 to 5.