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• Equity crowdfunding is attracting hot deals
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• Set your investment budget: $50k-$250k
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- 03 December, 2013
The CEO of Launch Angels on why crowdfunding means both more investment in female-led businesses and more female angels.
-By Shereen Shermak (CEO, Launch Angels)
Equity crowdfunding is in its early stages, but even at this point you can glimpse the potential. And that potential includes promise for both women angels and women-led companies.
THE EQUITY CROWDFUNDING EXPLOSIONFirst, a definition. Equity crowdfunding is investing in early-stage companies through web platforms, typically receiving stock for your money. At this point, only accredited investors (high incomes or high net worth) can participate. However, regulations are still being defined that may loosen that restriction.
Even under current restrictions, equity crowdfunding is rapidly growing. There are about 350 platforms in the US, with close to the same number around the rest of the world. According to GoGetFunding, among all the types of crowdfunding (including donation and loans), the equity crowdfunding segment grew the most from 2011-12—by an impressive 114%. And some projections show that $3-4 billion will be raised through equity crowdfunding in 2013. Just as tellingly, even as equity crowdfunding blossoms, venture firm investments are down.Equity crowdfunding is more than just a new way of raising money. It’s filling a hole in funding. You may have noticed ‘the gap’ in financing between friends and family investments and venture capitalists. Angels (wealthy individuals who invest their own money in startups) are in the same “neighborhood” of contribution as friends and family. But they are not generally accessible, with 70% of their deals done locally (Halo Report, Angel Resource Institute.).
WOMEN-LED COMPANIES AND WOMEN ANGELS ON THE RISE
Equity crowdfunding is democratizing funding in more ways than one, including opening doors for women. Some crowdfunding sites boast great statistics on women-led investing. At Indiegogo, 42% of successful campaigns were female-led. A majority of offerings on CircleUp are women-led deals. Women have also been serial backers more than men.
Equity crowdfunding might be impacting angel investing as well. According to the Center for Venture Research, between 2011 and 2012 alone, the number of women angels increased by 80%: from 12% of investors to 22%. Part of this is likely attributable to the ability to identify deals online through crowdfunding sites.
ON THE SIDE OF THE ANGELSI often hear women automatically dismiss themselves as potential angels. The reasons most commonly given:
- I don’t have the wealth to angel invest.
- I don’t have the time to angel invest.
- I don’t have the network to find the ‘good’ deals.
About the guest blogger: Shereen Shermak is CEO of Launch Angels (@Launch_Angels), an innovative venture capital firm that enables investors to create venture portfolios of $50k-$250k. Previously, she co-founded multiple software companies in the Boston area and built products for major financial services institutions. Follow her on Twitter @shrcubed.
Originally Published on: http://women2.com/equity-crowdfunding-good-news-women/#v00bXRLp5WO6qG6M.99
- 20 November, 2013
Shereen Shermak, CEO of Launch Angels, will be participating in Unpitch Boston on December 11th. Organized in conjunction with the New England Venture Capital Association, Unpitch Boston is a new event geared to connecting entrepreneurs with investors. No elevator pitches and no "demo day" presentations, and no event fees. This is a chance to sit down with an angel investor or VC for lunch in a casual, no-pressure environment.
- 04 November, 2013Launch Angels CEO Shereen Shermak will offer insights into equity investing with an after-work event on November 14 sponsored by the New England Venture Capital Association. Shereen will explore trends in equity crowdfunding and angel investing, explaining how Launch Angels provides an easy entry point into both. The event is scheduled for 6-8pm in Cambridge, MA. You can find more details and sign up for the event by clicking Here.
- 15 October, 2013UPDATE 11.4.13: Crowdfunding 101 for Women is the topic of Launch Angels’ November 4 presentation, co-hosted by PayPal and 85 Broads. The cocktail event, from 5-7:30 pm at our downtown Boston offices at One International Place, will feature an intro to angel investing and equity crowdfunding from CEO Shereen Shermak. She’ll examine how women are increasingly participating in and benefitting from both these opportunities—and why that’s good news for the economy. You can sign up for the event here: Event Signup
- 15 October, 2013As Launch Angels’ CEO, I had to be sold on the business before I came on board. Here are some of the reasons I concluded this is a great business, and why you should, too:
- First and foremost, a compelling product concept. Leveraging the changes in regulations provided by the JOBS Act, more accredited investors will have better options and transparency for investing in venture capital. Yet most investors find that researching the hundreds of options on equity crowdfunding sites is incredibly time consuming. Launch Angels does the work for you.
- Support for promising entrepreneurs. I am a serial entrepreneur, and I know what it’s like to start a business from the ground up. Often deserving businesses have not had the broad access to capital that equity crowdfunding allows.
- Economic growth through small businesses. Small businesses, on net, create most new jobs. As we exit the recession, the best way to add robustness to the economy is to help small businesses with good ideas survive.
- Diversity for my portfolio. If you are looking for venture capital opportunities and want a diversified outcome, take a look at our model and get more information.