Reg CF and Reg A+ deals are primarily available through FINRA-regulated platforms, which operate as two-sided marketplaces. These platforms face a “chicken and egg” dilemma: they can attract significant investment if they feature high-quality startup deals, but they can only secure the best deals if they have a large investor base. To gauge the success of these platforms, we analyzed the total investments made through each ECF platform for deals launched in January 2023 or later.
- The market follows the Pareto principle: 10% of platforms capture 88% of the investments, while 58 platforms split the remaining 12% among themselves.
- As consolidation looms—likely through mergers aimed at reducing costs and achieving economies of scale—leading platforms like Wefunder, StartEngine, and Dealmaker Securities command the largest share of the market. However, this is far from a “winner-takes-all” scenario. ECF platforms are still innovating and differentiating themselves to attract unique deals and investors. Nevertheless, to achieve profitability, platforms will eventually need to either expand their revenue streams or consolidate.
- Compared to last year’s data, StartEngine and Dealmaker have made significant strides in gaining market share, while Dalmore and Republic have seen a decline in their traction.
- Surprisingly, while we were expecting more ECF platforms to shut down, the market share of platforms outside the Top 7 grew from 5% to 12% year-over-year.
