Reg CF 2025 Outlook
Regulation Crowdfunding (Reg CF) is poised to again reach new heights. The exemption is back on track after a 2-year plateau according to a new, comprehensive report from Crowdfund Capital Advisors.
Now, as we approach mid-decade, Reg CF is again ascendant. And it will continue rising. As the decentralized, “sharing” economy moves beyond its West Coast origins and the rest of the country embraces it. By next decade, B-to-C businesses will incorporate Reg CF into their capital-raising strategy or risk being left behind.
Some numbers from the report:
- 284.5% Average growth in revenue between the year an issuer was successful and the following year
- 17.8% Bureau of Labor and Statistics Reports that approximately 50% of all new businesses fail within 5 years. Within Investment Crowdfunding, only 17.8% of funded companies have gone out of business.
- $2.2B invested $75.6B worth Companies that have been funded and priced to their most recent valuation
- Average investment size nears $2.5k
- Average raise topped $500k for the first time in 2023
- Total investment topped $150M for the first time since 2021
Trends show a bright outlook for Reg CF in 2025 and beyond
Here are a couple interesting charts among the hundreds in the report:
Why companies will choose Reg CF in 2025
More companies are looking for ways to integrate their business with their customers and build brand loyalty. Here are a few ways Reg CF helps:
- Broaden your investor base: Unlike other funding models, Reg CF can diversify your investor base from both a financial and geographical standpoint. Reg CF portals can accept investors from anywhere in the US, giving your business a potential foothold in all 50 states.
- Turn your customers into marketers: Reg CF allows your customers to become financially invested in your business and see their investment grow as your business grows. This provides a free marketing campaign for your business with every new investor.
- Incentivize your investors: Reg CF allows you to provide perks as part of the investment. Depending on the product this could include the product itself, ‘founder’ status on your website, access to events, or anything else that may induce an investment.
- Prove value to institutional investors: A successful Reg CF raise can show larger, institutional investors your business is ready for the big money. Many larger investors are now requiring “social proof” of a company’s business model. Your business can show larger investors value and momentum and provide your business “bridge money” while larger investors evaluate your model.
Read the full report: https://crowdfundcapitaladvisors.com/wp-content/uploads/edd/2024/02/Investment-Crowdfunding-Trends-2024-1-1.pdf
If you’re ready to explore how Reg CF can help your business sign up for a free 30-minute consultation: https://www.thecrowdfundinglawyers.com/cfl-scheduler/
By Jossey PLLC
