The well attended Crowdfund Global Expo, which took place last week in San Diego, had more than a few big names in the crowdfunding world in attendance. One of the leading industry advocates is Dr. Richard Swart who gave an impressive presentation on alternative finance / crowdfunding at the event. Swart is the Director for the Program for Innovation in Entrepreneurial & Social Finance at the Fung Institute. Fung is part of the College of Engineering at UC Berkeley. Swart leads a research team that is studying how crowdfunding and other innovative entrepreneurial finance models are changing the world of funding startups. Swart is also a partner at Crowdfund Capital Advisors Group (CCA) – a group that has been involved with the crowdfunding movement since day one.
The information included in this presentation (published below) is pretty encouraging for the growing industry of crowdfunding. The data includes:
- Consumer investment crowdfunding to grow to $93 billion by 2025
- If you include institutions this number jumps to $300 billion
- Over 90% of groups raising more than $5000 in successful projects turn into viable ventures
- Evidence shows that crowdfunding selects more viable firms
- 39% of firms quickly hire 2.2 employees
- Real Estate crowdfunding will gain significant traction
- There is significant “non-monetary” impact with crowdfunding. Connection to customers, validation and publicity are key.
While crowdfunding, both investment and rewards based, is growing rapidly in North America, Israel and portions of Europe – there remains an incredible opportunity within other regions of the world. China has “outsized” market potential. Other portions of Asia are showing signs of rapid growth. Swart states that South America and the MENA region will be part of the next wave for this global revolution.
Debt based crowdfunding or P2P platforms are expected to grow ten times over equity platforms – with growth accelerating over the next 2 to 3 years.
These are very encouraging numbers and foreshadow a future of profound impact as traditional forms of capital allocation are disrupted by the intrinsic nature of the internet.