Is Crowdfunding Worth It?

Now that crowdfunding has become an international institution, folks are starting to focus on results from crowdfunded companies. Is crowdfunding a worthwhile investment or a waste?

AltFi issued their first annual report noting that “to date, just 88 of those 955 raises have ended in failure, while 5 have delivered exits” with an 8.55% return. And the pace of deals (at least in the UK) has slowed with more companies showing problems sooner than their earlier funded cohorts.

While AltFi grades companies using traffic light symbology, the Securities and Exchange Commission wants crowdfunded companies to file and post annual reports on their websites that provide the same information as was in their offering documents.
http://www.forbes.com/sites/trevorclawson/2016/11/21/crowdfund-investment-crowdcube-says-agreed-performance-measures-essential-as-industry-matures/#596156855366

http://www.altfi.com/article/2380_over_88_per_cent_of_equity_crowdfunded_companies_still_trading_finds_report

https://www.sec.gov/rules/final/2015/33-9974.pdf

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About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in accredited investor, Broker dealers, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Film, Funding Portals, SEC, Small Business, technology, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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