Will 2013 Be a Bonanza Year for Crowdfunding?
Before the champagne flows and the fireworks pop New Year’s Eve is a time of predictions. And there’s one in particular that has caught our attention.
According to a guest post on the Forbes website by David Drake, founder and chairman of LDJ Capital, a New York City private-equity firm, ‘crowdfunding will make 2013 the year of the gold rush.’
As we have seen over the course of the last twelve months crowdfunding has gained momentum. The collective effort of individuals who pool their money to finance a start-up, project, innovation or endeavor is becoming a common way to raise investment capital. But we haven’t seen anything yet.
David Drake makes six predictions for crowdfunding and they include:
Global crowdfunding will double in revenue to $6 billion. To support this prediction he writes that a number of debt crowdfunding firms are growing globally, including “Zopa ($400 million since inception) and Prosper ($250 million).” The financial growth will also be powered by donations and rewards-based crowdfunding.
Crowdfunding platforms will turn into a commodity. There will be an increase in the number of crowdfunding sites, and private label crowdfunding platforms that are currently offered free to firms will start charging for their services. In parallel, a thousand sites will use crowdfunding with free API technology which can allow anyone to raise funds from thousands of donors.
Issuers will raise $1 million in capital per week. By the end of 2013 more than a hundred start-ups will have raised a minimum of $1 million through crowdfunding. And though it will become a generally accepted tool for raising capital the real explosion will come in 2014 when corporate America embraces it.
To read the full article on Forbes website click here.
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