Equity Crowdfunding by the Numbers: April 2023
Reverse trends dominated the first month of Q2 with venture funding’s precipitous decline continuing, amid sharp growth in Regulation Crowdfunding. Meanwhile, StartEngine hit its biggest funding milestone yet. Here’s April in review.
The Topline
According to equity crowdfunding publication KingsCrowd, funds raised under Regulation Crowdfunding (Reg. CF) hit $37.2 million in April, a 35% jump from the month prior. Combined with Regulation A+ (Reg. A+), industry totals reached $43.3 million to kick off Q2.1
As for StartEngine, funds raised under Reg. CF & A+ combined on our platform reached $11 million in April, or just over 25% of the industry total.2 It’s a big slice of the pie, but then again, we’re celebrating…
$700 Million Raised on StartEngine2
In the first week of April, StartEngine officially crossed $700 million in lifetime funding on our platform. It’s a, well…huge number, but it also reflects a recent acceleration in crowdfunding.
Case in point: it took us six years to raise our first $500 million and less than 18 months to raise $200 million more. If that trend continues, $1 billion may be closer on the horizon than you might think.
Founders We’re Celebrating (look out in your inbox)3
Equity crowdfunding is famously, well…all about the crowd. That’s why each month, we recognize founders who go above and beyond to help us grow our community – or crowd – of investors through our “Hot Off the Press” award.
“Hot Off the Press” Winners April
For bringing 100 first-time investors to StartEngine.
- Earth Robotics … awarded April 15
- Uncanny … awarded April 18
- Pashion Footwear … awarded April 22
- Hercules Mulligan … awarded April 25
- PittMoss … awarded April 28
- Hexact … awarded April 29
Where Will Venture Funding Bottom Out?
The latest reporting from Crunchbase found that the decline in venture funding may in fact be speeding up. According to the publication, global VC activity fell 53% YoY in Q1, but the April numbers are even grimmer at a whopping 56% dropoff from last year.
For context, that means last month founders saw $26.8 billion fewer dollars in venture capital funding than they did this time in 2022. It also begs two important questions: where’s the bottom? And what can fill the massive funding shortfall?
As StartEngine’s Strategic Advisor Kevin O’Leary explained at our latest pitch competition, founders shouldn’t expect institutional dollars to come back anytime soon.4 Shocks to the system – like Silicon Valley Bank’s abrupt collapse – have many VCs looking to protect their existing investments (i.e. not adding new companies to their portfolios).
Enter equity crowdfunding (c’mon, you know we’re gonna plug it). Early signs from 2023 suggest crowdfunding could be far more resilient to economic uncertainty than venture capital. On StartEngine alone, 14 funding rounds have surpassed $1 million raised so far this year as we’ve received more than 3,000 applications to raise capital on our platform. In other words, for all of us in the crowd – this could be our moment. Explore investments.
- Source: https://kingscrowd.com/markets/. Please note a KingsCrowd Edge Subscription is required to access this report.
- Includes funds raised via Reg. CF and Reg. A+ combined through StartEngine’s funding portal and broker-dealer, as well as StartEngine’s own raise.
- Why am I seeing these companies? Review how StartEngine promotes offerings here. These Reg CF offerings are made available through StartEngine Capital, LLC. These investments are speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.
- Kevin O’Leary is a paid spokesperson for StartEngine. View the details here.
