According to the ratings and analytics platform KingsCrowd, there are currently just shy of 2,000 startups actively raising capital through equity crowdfunding.
That just might be the lowest we see that number for a long, long time – maybe ever.
While the prevalence of equity crowdfunding has been on the rise among early-stage companies seeking capital, there is an even bigger, simpler reason for the relative growth of startups on these platforms…
It’s, well, the relative growth of the number of startups.
According to many, the key inflection point for founders was none other than the pandemic. While prior to 2020, the United States was amidst a 40-year decline in entrepreneurship, 2020 saw a 24% increase compared to the year prior.
As it turns out, that forward momentum has not slowed. Despite the macroeconomic downturn and sky-high interest rates, in 2022, roughly 14,000 new business applications were filed every single day – good for more than 5 million total.
And as further evidence of the decentralization of the startup landscape and overall shift away from a Silicon Valley-obsessed world, no area has seen a greater uptick in entrepreneurship than the Southern U.S. Florida and Texas, respectively, represented the two fastest growers in that regard.
Of course, while the number of startups rising means opportunities for angel investors similarly rise, the competition for funds among those startups has increased commensurately.
For some demographics, this makes a once-troublesome proposition even more so. For example, while 2021 saw female founders experience a slight uptick in the percentage of funds received, up to 2.4%, 2022 saw that figure drop back down below 2%.
That said, we’ve repeatedly harped about the number of successful businesses founded during economic downturns, so the sheer volume of early-stage companies entering the fold only increases those chances.
However, with the increased volume of companies seeking capital comes a need for increased scrutiny in evaluating investment opportunities.
Thankfully, the A+E team is here for you to see that standard through and ensure that only the best opportunities make it to your inbox.
We’re excited to find more among this new crop. The momentum is just getting started.
The A+E Network Deal Research Team