For more than a year now KingsCrowd has enabled investors in the online private markets to track their commitments in a free portfolio tool. In addition to keeping track of amount invested, dates invested, and originating platforms, the KingsCrowd portfolio also provides analytics unique to each user. These insights include portfolio allocation by industry, security type, and platform. In offering this tool, KingsCrowd hopes to make the online private markets even more accessible. In fact, accessibility is perhaps what makes the market unique. Investors can get in on deals with as little as $50.
With these accessible minimums, we wanted to see on average how much KingsCrowd portfolio users commit to individual deals. We looked at the median investor check size from 2018 through November 2021. All data is based on the year the investment was made, as reported by KingsCrowd portfolio users.
In 2018, the median investor check size was $500. Interestingly, 2018 had the highest median check size across all the years tracked. At this point, the online private markets were in their infancy. It could be assumed that investors that participated this early on had more confidence or experience with alternative asset classes. It would be unsurprising if the majority of individuals investing in 2018 were accredited investors already familiar the space. These investors may have been more comfortable contributing larger checks to startups raising at the time.
For 2019 and 2020, the median check size dipped to $250, half the median for 2018. Around this time the online private markets became a bit more popularized and likely attracted curious, everyday investors that perhaps were just beginning to learn about startup investing. Additionally, the number of startups raising money online increased in 2019 and 2020. This increased deal flow may have resulted in investors spreading smaller checks across a larger number of companies.
As of November 2021, the median investor check size increased to $336. This increase may be indicative of market skepticism relaxing among newer investors. This past year also saw decreasing trust in the public markets due to volatility and meme stock investing. The power of the crowd is becoming more and more apparent in financial trading which may spill over into the online private markets.
Perhaps the most important takeaway from examining average investor check sizes is that it proves the need and demand for accessibility. By being able to make investments that are only a few hundred dollars, many more investors are now able to access this form of capital generation than ever before. As awareness of the online private markets continues to grow, this accessibility will continue to be a key strength of online startup investing.
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.