Four years old… this is the age you can expect recognition of shapes and colors, and a love for rhyming words. Also for some 4 year olds I know (mine), the word “stop” may lose all meaning.

This is clearly the case with Reg CF in its fourth year, who is showing no intention of stopping. With our baby growing up, let’s see what we can learn from its impact on investors so far:

  1. There’s been a massive increase in the investor base. Over half a million people have invested through Reg CF, which is double the total from the prior year.
  2. The Pareto principle is at work. Over 80% of the investors are unaccredited, though the accredited 20% have contributed 80% of the investment dollars. This means accredited investors – who have lots of options – desire to invest in local businesses. Also, unaccredited investors are not bearing all the risk in these deals.
  3. Companies with successful Reg CF raises on average saw a 23% increase in revenues from the prior year. In addition to providing capital, investors can be a marketing force for the business and contribute to customer and sales growth.
  4. The SEC has reported no fraud and has expanded investment opportunities with new rules.

We’ve entered the new world of democratized finance, where private ventures are now open for public investing. We’re only 4 years in, but Reg CF is learning how to run.

All stats in this post were sourced from Crowdfund Capital Advisors’ report: “Regulation Crowdfunding – 4 Years in Review”.