Kingscrowd, a data specialist in the securities crowdfunding sector, has provided some data on 2024 activity. While not including Reg D 506c, which is almost impossible to track, Kingscrowd shares information on Reg A and Reg CF, which are available to both Accredited and non-accredited investors. As some platforms only sell securities under Reg D, we are missing an important aspect of online capital formation.
Reg A was a moribund exemption that received an update under the JOBS Act of 2012, making it a viable path to raising money. It allows issuers to raise up to $75 million in a securities sale that can be marketed online. Reg CF is a new exemption created under the JOBS Act, which allows firms to raise up to $5 million with just a notice filing.
The report states that issuers using Reg CF raised $343.6 million, a decline from the year prior when issuers raised $423 million – a 19% reduction. Issuers using Reg A raised $244 million – a decline of 12% compared to the year prior when issuers raised $277 million.
DealMaker led Reg A with $123 million) or 51% of all dollars raised, followed by Dalmore Group at $47.6 million, or 20%, and StartEngine at $32.2 million or 13%. These three platforms account for 84% of funds raised under Reg A.
Reg CF has declined for the past three years from a peak of $496.1 million in 2021.
The report notes that Reg CF issuers used common equity the most raising $303.4 million (88%) of investment volume. Debt-based offerings registered $40.2 million (12%) of investment volume.
The average check size for investors in Reg CF offerings was $1,500 — a 26% increase compared to 2024’s check size of $1,190 per investment.
Some key highlights of the data provided in the report:
- Final Amount Raised per Offering
Reg CF: Median $60k | Average $257k
Reg A+: Median $1.7 million| Average $6.5 million - Valuations:
Reg CF: Median $15 million | Average $36.5 million
Reg A+: Median $90 million | Average $345 million
Top Platforms by Capital Raised during 2024:
- Reg CF platforms:
Wefunder: $99.4 million
StartEngine: $85.6 million
DealMaker Securities: $48.9 million
Republic: $15.6 million
Honeycomb Credit: $9.8 million
Netcapital: $9.5 million
Issuance Express: $8.6 million
Dalmore Group: $6.6 million
Angel Funding: $5.0 million
SMBX: $4.9 million
- Reg A+ platforms:
DealMaker Securities: $123M
Dalmore Group: $48 million
StartEngine: $32 million
- Overall Online Capital Raising (Reg CF and Reg A+ combined):
DealMaker Securities: $172 million
StartEngine: $118 million
Wefunder: $99 million
Dalmore Group: $54.2 million
Equifund: $25.2 million
Average Check Sizes:
Reg CF: Average $1,500 (26% YoY increase from 2023)
Reg A+: Average $2,300
Funding Diversity:
34% of Reg CF companies had at least one woman founder.
34% had at least one minority founder.
Largest Raises:
- EnergyX reached the $75M cap under Reg A+, while five Reg CF campaigns hit the $5M maximum.
112 total raises that closed in 2024 raised over $1 million - 92 of those were Reg CF (7% of all rounds that closed)
- 20 of those were Reg A+
It must be noted that all private securities markets have declined in recent years due to high interest rates and a challenging environment. With the change in government in the US, expectations are for a resurgence in online capital formation along with increases in venture and private equity funding. Nothing is certain but there is optimism within the industry.
Additionally, there is legislation in the works that was once blocked by the Democrats that may now be improved, which will boost access to capital, including online capital formation. Creating rules that directly address the digital asset sector is also good for investment crowdfunding.
The Kingscrowd report has a lot of good information. You may review it all here.