If popular websites like Kickstarter and Indiegogo got the crowdfunding party started, it is equity crowdfunding that's going to keep the party going. And it's already off to a fast start: Deloitte expects all forms of crowdfunding to reach $3 billion globally in 2013 and grow at a compound annual growth rate of 100 percent over the short term.1 Equity crowdfunding, still in its infancy, is expected to grow even faster, with a compound annual growth rate of 114 percent, according to Massolution,2 a crowdfunding research firm.
Crowdfunding may still be in its infancy, but it's making its way quickly to the mainstream both in the U.S. and globally. New platforms are emerging every week to pair crowds and their funds with worthy projects. North America leads all regions in crowdfunding volumes, growing an estimated 105 percent to $1.6 billion by the end of 2012.3 Crowdfunding, in all its splendor, threatens to disrupt traditional funding models, as companies and individuals are becoming more receptive to these alternative channels for raising capital.
Crowdfunding had a breakout year in 2013. Lending Club, a peer-to-peer lending platform, surpassed $2.5 billion worth of loans underwritten by the crowd. Companies raising money via donation/rewards-based platforms were repeatedly featured in the news with story after story of successful crowdfunding campaigns of over $1 million. It appears that everything can be crowdfunded: from mortgages to medical school educations to innovative ...