I am the Director of Crowdfunding NZ, and founder of equity crowdfunding platform Fundakiwi.com.

Is equity crowdfunding preventing startups from raising more capital?

By Clive Fernandes
Originally posted on the Crowdfunding NZ website

CrowdFund Capital Advisors recently released a report which is an interesting read on deal-flow as a result of Equity Crowdfunding. What really got my attention in this report were the following stats.

Within three months of a crowdfunding campaign:

– 28 percent of the companies had closed an angel investor or venture capital round.
– An additional 43 percent were in discussions with institutional investors.

This finding refutes the assumption that Equity Crowdfunding dissuades follow up investment, which could be one of the major negative perceptions that entrepreneurs and startup companies would have had with Equity Crowdfunding. The theory is that a potential Venture Capital firm would be put off from investing in an Equity Crowdfunded startup because of the thousands of existing shareholders it already has. The CCA report has shown this to be untrue and in my opinion the reasons are as follows.

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