Crowdfund Capital Advisors (CCA) has released an update on the investment crowdfunding activity under Regulation Crowdfunding (Reg CF) in August 2023. Despite the recent struggles in public markets, Reg CF offerings experienced a surge during the month.
According to CCA, there were 118 new issuers filing to raise money online in August, a significant increase from the tepid 80 new filings in July. Although the number of filings in August was slightly below the 12-month average of 124 filings per month, the rise can be attributed to firms seeking growth funding at the end of the summer, as investors become more engaged after Labor Day.
During August, a total of 107 deals closed, raising $38.8 million. This is a significant increase from the $25.3 million raised in July. Moreover, 72% of the issuers hit their minimum funding goals.
CCA highlights that Wefunder continues to lead the Reg CF sector in both the number of offerings and funding raised.
Among the companies that raised funds, post-revenue issuers accounted for nearly half of the total amount raised (49.8%), while pre-revenue startups accounted for only 9.4%.
There were 20,659 individual investments made in August, showing an increase from July’s 17,411 but falling below the yearly average of 25,600 investments.
While the number of investments may have decreased, the amounts committed have increased. The average amount committed reached its second-highest at $2,739, according to CCA.
In addition, CCA reports that 42 offerings were launched by women and/or minority issuers in August, up from 36 in July. Furthermore, 31% of successfully funded deals had a woman and/or minority founder, emphasizing the significant role they play in online capital formation.
CCA views the performance of Reg CF as reflecting the resilience and potential of the sector. As the industry transitions into the fall, a historically favored fundraising period, there are high hopes for its continued growth, though caution remains due to the broader economic environment.
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