Crowdfunding Market Size

Why Crowdfunding Is Set to Explode in Size Over the Next Few

Peer-to-peer lenders may be in for boom times.

The type of social-driven lending that helped fund flashy startups such as virtual reality goggles maker Oculus VR could more than double over the next few years, according to research from the Tabb Group. Oculus was scooped up by Facebook for a cool $2 billion less than a month ago after receiving its original funding through the crowd-funding company Kickstarter.

Tabb, in a recent report, estimates that the crowd sourcing market could hit around $17 billion globally by 2015, with more than 1, 000 funding organizations formed to raise money. That would represent an eye-popping 200% increase in crowd-funding and an 88% increase in the number of lending venues throughout the world, Tabb says:

Angel investors (mostly so-called “accredited, ” high net worth folks who pass a set of financial thresholds) will provide some of the crowd-sourced funding and, across all funding paths, as much as $50 billion in financing in 2015, up from $22.9 billion in 2012. A more conservative growth estimate puts 2015 angel investments at $28 billion in 2015.

Source: Tabb Group

Social lending outfits such as Kickstarter and Indiegogo, as well as organizations such as Lending Club, would benefitting from new general solicitation rules enacted last year. Under the new rules, which were mandated by the JOBs Act, the Securities and Exchange Commission permits private companies to advertise widely in order to raise funds from “accredited” investors, generally those with a net worth of at least $1 million excluding the value of a residence. (There are still some restrictions on such advertising, explained by the SEC here.)

Crowd-sourced funding would also benefit from the SEC’s proposed proposed framework for rules that would allow lower net worth, “non-accredited” individuals to invest in private enterprises. Under those rules crowd-funding would be allowed though a registered broker or lending portal and within certain limitation around how much investors can plunk down in a startup.

It’s also possible that crowd-sourced lending would benefit indirectly from newleverage ratio rules which require traditional US lenders to hold more capital in reserve. Tougher bank capital requirements already are taking their toll on the volume of small business loans originated by banks. As the chart below indicates small business lending has fallen by 32% from a 2008 peak of 711.5 billion loans.

Wiley Crowdfunding: A Guide to Raising Capital on the Internet (Bloomberg Financial)
Book (Wiley)

Fundable indiegogo kickstarter

by Acumagnet

Here are your chances to make a fast cool million.
Make 3 bogus but plausible programs that get people ecited. Raise as much money as possible.
Collect money and leave country.
I got screwed on prosper, and those same people, with bad credit, go to crowdfunding websites with even less to prove about their viability except for some crazy idea on how to make money.
There are already people getting screwed on these crowdfunding sites. It would be nice to have a website monitoring this and compiling the stories.

Odyssey Business Class Airline Venture Looks to the Crowd for Funding  — Crowdfund Insider
Hoping to become the next big thing in England's airports, Odyssey Airline Limited has launched an equity crowdfunding campaign on Crowdcube.

Adams Media The Everything Guide to Crowdfunding: Learn how to use social media for small-business funding
Book (Adams Media)
Sean Akers The Secrets of Crowdfunding: A Step-by-Step Guide to Getting the Most From Your Kickstarter Campaign
Book (Sean Akers)
CROWDFUNDING: The Complete Guide to Using Kickstarter, Indiegogo, and Other Crowdfunding Sources
eBooks ()
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