According to Crowdfund Capital Advisors (CCA), Reg CF (Regulation Crowdfunding) had a booming month in August. While other markets sank (think crypto and public securities), platforms participating in securities offerings under Reg CF jumped.
CCA reports that new issuers hit a record 159 companies aiming to raise capital filed with the SEC. Issuers increased by 26.2% versus July 2022. Meanwhile average investments rose along with valuations as more mature firms take advantage of raising capital online.
The company reports that there have been over 240,000 investors participating in these securities offerings since January.
Wefunder led with the overall number of offerings listed followed by StartEngine. Typically these two platforms vie for the most listings and funding raised under Reg CF.
The jump in August numbers follows a soft summer – a period impacted by war in Ukraine, drastic inflation and heightened geoplicital risk (think China). While August has been a solid month, the rest of the year may be choppy as the Fed returns to discuss interest rates once again – most likely increasing – and the legislative agenda may include more government funded programs (think more stimulus when we don’t need it).
Reg CF saw its funding cap increase in 2021 from $1.07 million to $5 million thus making the securities exemption more viable for seed stage and, perhaps some A rounds. Once the dust settles, and interest rates go down, online investments should rebound more consistently.