WJR Business Beat: Equity Crowdfunding Still Strong (Episode 443)

Good morning, Paul!

While much of the startup early-stage investing community has been stifled due to our economic conditions we’re currently facing, one funding source seems to be weathering the storm and maybe even thriving. And that is known as equity crowdfunding, also known as online startup investing.

This type of funding is made available through platforms like StartEngine and KingsCrowd, and they provide opportunities to individuals to invest directly into startups featured on their platforms.

Data released recently by KingsCrowd provides a look at how investment activity of this type is currently trending. They report that while early on, many people doubted the staying power of these online startup investing platforms and retail investors interested in investing through them. Now on the other side of a pandemic and on the edge of a potential recession, startup investing of this type has proved that it is here to stay.

The KingsCrowd data shows that in the first half of 2021 shows a total investment level of $219 million, while in the same period in 2022, investments totaled $235 million. KingsCrowd published the following statement regarding the encouraging news: “Although 2022 has begun with concerns about high inflation and a potential recession, online startup investing has held steady. While times of economic hardship can be risky for investing capital, they are often times of opportunities as well. The ability for investors to buy low, thereby enabling them to sell high at some later point is sometimes best achieved in markets just like these.”

Now I agree that this is indeed a really strong time to make select investments into the most promising startups.

I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.