Crowdfunding Taking A Breather

Capitalism is taking a breather due to the corona virus.

The United Kingdom’s two largest crowdfunding platforms have noted at least a 20% decrease in crowdfunding campaigns going “live” and in public investments in on-going ones.

Screen Shot 2020-04-02 at 8.39.54 AM

According to the website Sifted, CrowdCube has 9 of 27 campaigns that have seen zero investment.

Of course, this is not unexpected with the public stock markets in turmoil. When public liquidity diminishes or becomes more volatile there is typically a rush to safety, and that often means that investors want to stay in cash.

In this time of uncertainty as to even whether one will be getting his/her next paycheck, putting money into startups is considered to be even a more risky bet.

Once the clouds clear, it’s likely that this pause in startup investing will accelerate.

Let’s hope it’s sooner rather than later.

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:
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