Equity Crowdfunding: Promising, But Messy by Now


A new start

After waiting a long time, the Crowdfunding settlement was finally released by the US Securities and Exchange Commission (SEC). The SEC also set May 16, 2016 as the official date to allow websites to offer equity crowdfunding service. Since May 2016, a group of approved websites has entered the US crowdfunding market.

Diversified crowdfunding services

A glance at the US market crowdfunding: we see that the market is a little messy and very confusing. Crowdfunding market players include websites offering diversified services. These actors include donation-based websites such as Kickstarter and Indiegogo, state-approved websites for state-of-the-art crowdfunding, and websites offering D-based and / or regulatory-based services. or A or only for qualified investors.

The new websites that are supposed to offer Title III, equity-based or simply equity-based crowdfunding can have confused business and investors. Of these new websites, some of them have already had a crowdfunding activity for a number of years and have been open to qualified investors or have accepted an investment in accordance with D / A regulations, etc.

Brilliant future

Over time, any website wishing to offer Equity III (or equity) equity financing will need regulatory approval. But now, business owners or investors need to determine which website offers which type of crowdfunding service before using one. This may be one of the reasons why crowdfunding sites, including some sites with millions of visitors, have seen a significant drop in traffic in recent months.

Although no one knows what will happen on the US crowdfunding market in the future, it is hoped that the market will be played by itself. With the Crowdfunding regulation in place, the US crowdfunding market will grow and develop to become a healthy market.

In other countries, crowdfunding has been launched without proper regulation. The market quickly turned sour for businesses and investors. Although most crowdfunding websites in this country are honest players, the bad reputation of the entire industry is forcing most players to withdraw completely from the market or to conduct crowdfunding activities under the umbrella of other enterprises.

One of the key questions for the US crowdfunding market is whether "crowd" will support and invest in companies looking for funding on websites. At the moment, no one has an answer yet.

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