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November 2, 2023   Entrepreneurs, Start-ups, Small Businesses, Equity Crowdfunding, Alternative Funding, FinTech and Alternative Finance, Fintech International, Fundraising, Investing, Trading, Innovation and Resources, Research, Venture Funding and Building   No comments

U.S. RegCF Trends: Investment Engagement by Age

Investment Crowdfunding | Nov 2, 2023

Diversity by age - U.S. RegCF Trends: Investment Engagement by Age

Crowdfund Capital Advisors Founding Partner, Sherwood Neiss (NCFA Advisor) has released another data-driven update on Regulated Crowdfunding (RegCF) in the US.  This time looking at investment trends by age bracket.

RegCF (otherwise known as Equity Crowdfunding) has emerged as a democratic force in the investment domain, enabling both retail and accredited investors across America to participate in the funding of startups and small enterprises. Since its establishment in 2016, this sector has demonstrated impressive growth, diversifying the investment ecosystem and offering a wealth of data on investor behavior across various demographics.

Investor Engagement

A thorough analysis, conducted in collaboration with three major online investment platforms—Wefunder, StartEngine, and Republic—has provided a granular view of investor engagement and capital deployment.

Wefunder leads with higher average investments across all age groups, particularly excelling in the 40-49 age bracket.

Republic, with its lower average investment, attracts a younger demographic, boasting twice the average number of investors under 30.

StartEngine strikes a balance, with a fairly even distribution of investors across the 30-59 age groups, maintaining a consistent average investment size.

  • Together, these platforms represent 71.2% of the industry’s volume since its inception.
  • The data reveals that individuals in the 30-49 age bracket are the most active investors, making up 49.7% of all participants.
  • This demographic’s engagement suggests a strong connection to the entrepreneurial world and a potentially higher risk tolerance.

See:  Celebrating 7 Years of Regulation Crowdfunding: 4100 Startups Now Valued at $60 Billion

Capital Deployment

  • The 40-59 age group leads the pack, contributing a substantial 50.9% of the total capital.
  • This trend underscores the financial robustness of individuals in their prime earning years.
  • However, a noticeable tapering off in investor numbers in the subsequent age groups, particularly among those aged 50-69, indicates a shift in financial priorities and risk tolerance as retirement looms.

Investment Trends Across Age Groups

  • The investment landscape further reveals a trend of increasing average investment amounts with age, reaching its zenith in the >70 age bracket.
  • This pattern suggests a greater financial capacity or willingness to invest more money in crowdfunded ventures among older individuals.
  • As such, 18-29 age group exhibits lower average investments, a trend that can be attributed to financial limitations and reduced disposable income typical of early career stages.

See:  Equity Crowdfunding Demystified: Insights from Wefunder and Equivesto

Conclusion

Understanding the investment behaviors across different age demographics and platforms can give both entrepreneurs and investors valuable insights to optimize platform selection and participation to increase their chance at succeeding in this growing area.

NCFA Jan 2018 resize - U.S. RegCF Trends: Investment Engagement by AgeThe 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, artificial intelligence, 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

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