Kickstarter and Indiegogo not only popularized crowdfunding but also put it on the map for the common crowd member. While the industry certainly owes some of its growth to their success, the domination of the donation-based crowdfund is coming to an end. Juniper Research, a UK based mobile, online and digital marketing research company, has made a couple of predictions. By 2020, we will see equity crowdfunding become the new king, globally, in terms of fintech advancement, though debt crowdfunding will have the greatest share of crowdfunds in non-tech related fields (which seems to hold true for real estate as well).
There are two key factors that play into Juniper’s prophecy for crowdfunding’s future: inclusive legislation and hybrid platforms. In case you somehow forgot from this past October, the SEC ruling on Title III of the JOBS Act will allow for even more people to become investors in crowdfunding (due to the clause about non-accredited investors). Juniper predicts that other nations will follow suit and pass more inclusive legislation as well, which will lead to an in flux of funding from 2016 and beyond. The other factor, hybrid platforms, can be seen on sites like “Fig”, wherein they give the investor the option to chose to support the project and receive a reward like in a traditional, donation based crowdfunding effort, or equity. One can imagine how these hybrid platforms could be rather compelling to both those seeking funding and those looking to fund. For the former, this gives you a chance to play to both the accredited and the non-accredited investors; for those funding the campaign, regardless of whether you want a piece of the action or just to support something you think “would be cool”, like the videogames on Fig, you’ll be assured a rewarding response to your contribution.
In short, we will continue to see equity and debt crowdfunding grow as we look to 2020, while solely donation based crowdfunding may take a few hits. But for those of you who like your t-shirts or the other, smaller rewards, do not fret; for the time being, it looks like you’ll have access to both choices.
To learn more about this trend and predictions visit Crowdfund Beat for the original article.
