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From the SBA — Crowdfunding: New Rules, New Report

As the final equity crowdfunding regulations will become effective shortly, the U.S. Small Business Administration has published a new report and report summary.

Highlights from today’s report include:

  • Successful crowdfunding campaigns positively influence entrepreneurs’ ability to attract additional capital, likely by providing proof of concept to potential external investors.
  • There is no evidence that the gender of the entrepreneur has influence on the investments after a successful crowdfunding campaign.
  • Successful smaller crowdfunding campaigns or those raising less than $75 thousand could illustrate to investors a viable business model. These smaller campaigns, which could likely signal proof of concept, can increase chances of obtaining further external capital.
  • Entrepreneurs that raise over $125 thousand from successful crowdfunding campaigns have more than a 50% probability of obtaining external capital.

As access to business funding for start-up and growth persists for small businesses, crowdfunding may become a powerful tool for the future.