Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets
Crowdfund Capital Advisors | Sherwood Neiss | March 20, 2020
The Coronavirus is taking the financial markets by storm. It began its attack on the public markets around February 12th. Since then, the markets have dropped 30% off their highs and have made wide swings from one day to the next. It has been one of the most volatile periods in history. While we have yet to see how everything will play out, it is encouraging to see that this volatility has seemingly not had the same impact on private funding online. The data shows that people are still investing in their local businesses via online platforms. And their numbers are growing year over year. This will play an important role as we emerge out of this pandemic. We wanted to understand what is happening, so we dug into the data, reached out to a few platforms, and this is what we learned.
See: US Reg CF Funding Portals: 50 in Total with Several Exits and Several Additions. Is Reg CF Ready to Scale?
Since February 12th, over $11.6 million has been invested into over 320 active companies, who are raising money on 13 online investment platforms. Over 21,000 investors have made individual investments into these companies. Comparing this to the same period last year, $9.8 million was invested into 227 active companies on 17 platforms by over 11,000 investors. There were 41% more active companies during the same period last year. The amount invested was up 16.3%, and the number of investors engaged was up 90%. All of these select private market indicators were up despite the public markets being in a free fall.
The image below shows period over period activity from February 12th to March 18th. What we see is that, despite the volatility in the public markets, this segment of the private capital markets appears to be withstanding the negative impacts … for now.
There have been several breakout companies during this period of public volatility. The list below shows the top 10, who they are, where they are based, where they are raising funds, and how much they’ve raised during this period.
| Company | City | Listing URL | Amount Raised 2/12/20 to 3/18/20 |
| Mightly Quinn’s | Passaic | https://www.seedinvest.com/mightyquinns/series.b | $1,075,619 |
| Lost Spirits | Vernon | https://wefunder.com/lost.spirits | $1,070,000 |
| Black Sands Entertainment | Brooklyn | https://wefunder.com/black.sands.entertainment | $480,000 |
| Ample Foods | San Francisco | https://republic.co/ample-foods | $295,836 |
| McSquares | Denver | https://wefunder.com/mcSquares_The_Art_Of_Whiteboarding | $282,207 |
| Neurohacker | Carlsbad | https://wefunder.com/neurohacker | $277,529 |
| Called Higher Studios | Franklin | https://www.startengine.com/called-higher-studios | $274,730 |
| GenesisAI | Allston | https://wefunder.com/genesis.ai | $263,725 |
| Copperworks Distilling | Seattle | https://wefunder.com/copperworks.distilling | $259,637 |
| Fisher Wallace | New York | https://www.startengine.com/fisherwallace | $249,693 |
We asked some of the platforms for their thoughts on why the private capital markets might be operating differently from the public ones. Ryan Feit, CEO of SeedInvest, shared an interesting perspective. As he put it:
“Sentiment is good. Venture will freeze up and entrepreneurs will need to utilize alternative sources of capital more than ever. On the investor front, the public markets will undoubtedly take a toll but given that the private markets have a low correlation to public and with interest rates at zero, hopefully people will continue to shift capital away from traditional assets.”
Jonny Price, Director of Fundraising at Wefunder felt
“It is too early to tell. While he could certainly see how this crisis would lower investment volume March 2020 has been is our best month ever already.” He also agreed with Pettid and Feit above by stating, “You can make a case that when the stock market is crashing, investors will seek alternative investment opportunities. And when conventional sources of capital dry up (e.g. VC), more founders might turn to their fans and customers for capital.” His last thought was most poignant, “High level — if there was ever a historical moment for a democratic and people-powered financial system, this would seem to be it.”
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
Support NCFA by Following us on Twitter!Follow @NCFACanada  |
Related Posts
Opinion: The Financial Surveillance System May Be Less a Tool for Crime Prevention than a Means of Bureaucratic Ass Covering- Gen Z VCs are entrepreneurial, digitally native, values-focused
- So This Just Happened… RED Mountain Hits Their $10 Million Goal on Crowdfunding
- NFT Use Cases are Establishing New Legal Frontiers
- Fintech boom helps Seedrs to ‘record’ £293m crowdfunding in 2020
- Canadian Exchanges to Report Transactions Over $10k per Proposed Regulations
Leave a Reply