Startup Deal Flow Keeps Getting Better - KingsCrowd

November 17, 2021

Startup Deal Flow Keeps Getting Better

Online startup investing has made a key method of wealth generation accessible to everyone. This new accessibility is a boon to both investors — by democratizing wealth — and founders — by widening the audience for capital generation. As such, the online private markets have seen ample growth since 2018. This week we examine that growth by looking at the number of new raises as well as the total number of active and closed raises since the beginning of 2018 through the third quarter of 2021. This data focuses on Regulation Crowdfunding and Regulation A equity-based raises.

Equity Crowdfunding Raise Activity Over Time

The number of new raises has grown steadily over time. In the first quarter of 2018, there were 128 new raises. Three years later, the first quarter of 2021 saw more than double that at 261 new raises. This steady growth is very encouraging because it indicates that deal flow for online startup investing is increasing sustainably. Furthermore, the total number of active and closed raises has substantially risen over the last three years. In January 2018, KingsCrowd saw 153 total active and closed raises. In September 2021, that number hit more than 600. In fact, the total number of active and closed raises has not dipped below 200 since September 2019, more than two years ago. 

If you have been following the online private markets for some time, you may remember that in late March 2021, the SEC increased the annual raise limit for Regulation Crowdfunding to $5 million (up from $1.07 million). Interestingly, the total number of active and closed raises tracked by KingsCrowd dipped for a short period of time following this regulatory change — and then promptly shot up to new highs. This activity may have been the result of larger, more established startups taking note of the increase in maximums and turning towards the online private markets. However, there also seems to be a historic pattern of a slight dip in raises around the second quarter of many years. Overall raise activity has grown an impressive amount over the last three years, and there is little indication that the growth will stop anytime soon. Both new raises and total active and closed raises show clear upwards trends.

Note: all data used for the Chart of the Week comes from the KingsCrowd database and represents a snapshot of the crowdfunding market.


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About: Olivia Strobl

Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.

View Olivia Strobl's articles

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