Equity Crowdfunding: Guaranteeing, However Untidy right now

A New Beginning


After waiting for a lengthy time frame, the Regulation Crowdfunding was finally released by the U.S. Securities and Exchange Commission (SEC). The SEC also set May 16, 2016 as an official date to let websites provide the equity crowdfunding service. Since May 2016, a small grouping of websites that received the approval for operation have entered the U.S. crowdfunding market.


Diversified Crowdfunding Services


An instant look of the U.S. crowdfunding market, one would learn that the marketplace is type of messy and very confusing. The players in the crowdfunding market include websites that have been offering diversified services Wefunder. Those existing players include donation-based websites such as for instance Kickstarter and Indiegogo, websites that were approved by state legislation and regulators for intrastate equity crowdfunding, and websites that offer services predicated on Regulation D and/or Regulation A, or to accredited investors only.


The brand new websites that are supposed to supply the Title III, equity-based, or simply just equity crowdfunding service could have added more confusion to businesses and investors. Those types of new websites, some of them have previously held it's place in crowdfunding business for quite some time and opened to accredited investors or accepted investment for Regulation D/A, etc.


Bright Future


As time passes, any website that wants to supply the Title III (or equity) crowdfunding would need to get approval from regulators. But, by now, either business owners or investors have to determine which website offers what type of crowdfunding service before using some of them. Perhaps, that was among the reasons that crowdfunding websites including some with millions of visitors have seen significant drop in traffic in recent months. Although nobody knows what will happen in the U.S. crowdfunding market as time goes on, it is hopeful that the marketplace will play it out by itself. With the Regulation Crowdfunding in place, the U.S. crowdfunding market will grow and expand to a wholesome market.


In a few other countries, crowdfunding was launched without proper regulations in place. Industry was quickly turned to be sour for businesses and investors. Although most crowdfunding websites because country are honest players, the bad standing of the whole industry pushes most players to either get out the marketplace entirely or conduct crowdfunding business under an address of other businesses. Among the key questions for the U.S. crowdfunding market is whether "crowd" will support and purchase companies that are looking for funding on websites. At the current time, no one has an answer yet.

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