wjr business beat

WJR Business Beat: Equity Crowdfunding Plays Key Role in Funding Startups (Episode 320)

On today’s Business Beat, Jeff reveals the results of a Kings Crowd study on how online equity crowdfunding is changing the landscape for startups.

Tune in to the Business Beat, below, to learn more about where the shifts in crowdfunding are changing:

Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE.

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Good morning, Paul! Well, it used to be that if you wanted to create and grow a fast-growth startup, the marching orders were go west. You better base yourself in Silicon Valley, but my how times are changing. As we’ve reported here on the Beat previously, there are many more deals getting done and startups getting financed across the country, including right here in the Midwest, like never before. Now, contributing to this positive change in part has been the success in getting startups funded through online equity crowdfunding. These platforms provide for the investment by qualified investors directly into startup companies through what’s known as a regulation offering, and given the decentralized nature of online startup investing platforms, you might guess that startups have become less localized to specific regions. The idea is that founders from anywhere in the country should be able to launch their companies anywhere in the country. That’s the idea anyway. Well Kings Crowd, one of these equity crowdfunding platforms, analyzed the state of origin for all equity crowdfunding raises from January 2018 through October 2021, to see if indeed certain areas of the country still dominate the launch of startups. And while online startup investing has made location less strict for companies, their research shows that in fact, we still see that certain regions dominate the country and startups. And where else but California? They’re the leader far and away. In fact, out of more than 3,000 companies in the database study by Kings Crowd, 868 of them, nearly one-third of the total, were launched in California. Following California in the top spots were New York, Florida, Texas and Massachusetts, which pretty much mirrors the historical trends. However, there was some interesting shuffling of the deck going on, namely that startups launched with online crowdfunding based in the South surpass the Northeast and the number of startups for the first time. So these figures seem to indicate that the decentralization of startups maybe is really starting to happen. 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.

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