Crowdnetic has published its annual Crowdwatch report on Title II investment crowdfunding as enacted under the JOBS Act of 2012. Title II, or Reg D 506(c), allows issuers the option to “generally solicit” or to promote their securities online to accredited investors. According to their numbers, as of September 23, 2016, there has been 6,613 Title II offerings from 16 different online platforms. These offers have generated over $1.47 billion in aggregate commitments during the past three years.
The report also states that the number of new offerings has declined from year to year but the annual aggregate amount of recorded capital commitments has increased each year. Cumulative success rates have also increased each year, to the current level of 30.5%.
The top sector according to Crowdnetic is the Financial Sector. This category has maintained the leading position by more than $200 million in recorded capital commitments as of this year. This sector includes real estate development and real estate investment industries so it should not come as a surprise. Financial Services also posted the highest average capital commitments per successful issuer, at $1.27 million, which is 73% higher than the overall average across all sectors.
Following the Financial Sector is services at $352 million and then Technology at $181.8 million.
Social Media registered the highest number of offerings at 317, followed by Real Estate Development (266) and Real Estate Investment (190).
Real Estate also claimed the highest amount of capital commitments at $261 million with Entertainment in a distant second at $127.5 million. Real Estate also had a very high success rate at over 70%.
Geographically, the San Francisco bay area dominated with number of deals and overall capital committed. Correspondingly, California was the top state for number of deals and capital committed followed by New York.
The authors stated;
“Securities-based crowdfunding continues to fill a void in the capital-raising arena, allowing investors to diversify their holdings and to gain access to innovative companies, and providing entrepreneurs with an alternative method of capital formation as well as an opportunity to validate their business models and products via the crowd.”
The report is embedded below.
[scribd id=328875375 key=key-mX8I9z1RCsoSardTNq4e mode=scroll]