It came to light today that Kickstarter ended up raising $529 million for crowdfunding projects in 2014 – roughly 10% more money than they raised for crowdfunding campaigns than in 2013. All told – 22,252 crowdfunding projects succeeded which is also a record for Kickstarter. It’s safe to say that Indiegogo saw similar increases in terms of crowdfunding dollars raised and crowdfunding projects that succeeded. These crowdfunding statistics are understandably a little watered down when it comes to Indiegogo due to their flexible funding option. In the world of Kickstarter not a single dollar reaches the coffers of crowdfunders unless their original funding goal is met. This all-or-nothing model doesn’t necessarily apply to Indiegogo as crowdfunders can opt for fixed funding or flexible funding. With Indiegogo’s flexible funding approach to crowdfunding, money is collected and passed on to the crowdfunder even if their goal isn’t met albeit at higher fees.
I see reward crowdfunding (vis a vis Indiegogo, Kickstarter, RocketHub, etc.) as going nowhere except straight up to the moon across the board in 2015 and beyond.
But let’s turn our attention to the lesser-know and far less covered equity crowdfunding world.
In 2012, Congress passed the Jumpstart Our Business Startups (JOBS) Act to bring equity crowdfunding to the forefront. A federal crowdfunding exemption under the JOBS Act is currently stalled, meaning that true, nationwide crowdfunding is not possible. As federal guidelines on equity crowdfunding remain nebulous, states will continue to lead the way. Everyone can expect equity crowdfunding to exponentially expand in the states where equity crowdfunding laws are in place.
A relevant example of this is 1031Crowdfunding, LLC out of California. With a scheduled launch next month, 1031 Crowdfunding is giving equity crowdfunders a glimpse of the future.
How does 1031 crowdfunding work? Accredited investors will be able to buy beneficial interest of larger high quality investment properties in a Delaware Statutory Trust (DST) that are section 1031 compliant through their FINRA member broker dealer. All transactions will be executed on their secure, state of the art platform which allows interactive transparent access to all pertinent information and an economy of scale not available to investors before.
Interested 1031 Exchange investors can register on their website ahead of launch and be among the first to know the latest developments in the newest crowdfunding platform.Check out The Official 1031 Crowdfunding Website.