Now is the time when all the prognosticators come out of the woodwork for 2015, while dodging botched predictions for 2014. It is a time honored tradition. So here goes my 2014 dodge. I’ll cover 2014 more thoroughly when data get released but offer now a Top Five Countdown of insights for 2015….
- Accredited Investors Look to Start-up Investing. With something like only one out of three accredited investors involved with start-up investments of any kind, perhaps half of the remaining investors avoid start-ups by disposition and the remaining are simply limited by lack of access, a whole new world of investment opportunity in equity and debt offerings has opened to these investors. Nonconventional capital will be a game changer for entrepreneurs. Expect to see more numerous young, successful, innovative businesses in 2015 than ever before.
- Crowdfunding Inspires Other Industries to Cut Out the Middle Man. There has been a trend over the past several years to seek nontraditional access to information and for businesses to provide direct access to products and services. Innovative aggregators like CEO Parker Conrad of Zenefits.com who provides benefits and insurance over the cloud cuts out the need to deal with multiple benefits providers and decreases costs significantly. Expect to see more innovations that mirror crowdfunding’s global access, faster efficiency, and reduced cost structures. If crowdfunding offers alternatives to traditionally bloated and cumbersome financing companies and real estate (for heaven’s sake) is jumping on board, more nimble industries will see immense growth and innovations in 2015.
- Digital Marketing and Social Media Continues to Grow. While some of the largest social media sites continue to struggle to capitalize on their successes, the rest of the world’s industries are not having difficulties. Social media and marketing will continue to expand dramatically as new firms enter the field and more established firms transition their brand to encompass this “no longer fad” that is “no longer just for the young”…. In crowdfunding circles, companies like RAZRVentures.com provides marketing services for equity and debt seeking company offerings while connecting those companies to accredited investors. Likewise in the rewards crowdfunding space, companies like Crowdfundingpays.com and Ignitecfp.com do likewise.
- Others Follow Where Angels No Longer Fear to Tread. Angel investors are launching into crowdfunding. It was estimated that nearly 10% of all Angels invested in crowdfunding in 2013 from a dead start. Signs suggest rapid growth for 2014 (even if numbers won’t be out for a couple months). Sophisticated investors are taking advantage of crowdfunding and accredited investors, who number in the millions across the US alone, are following suit.
- Real Estate Crowdfunding. According to a sageworks.com report for the trailing 12 months as of the last reporting period in July, three of the top ten most profitable industries involved commercial real estate and management services. That industry knowledge, combined with a recent report by crowdvalley.com that states that real estate crowdfunding doubled from 2012 to 2013 and is expected to double again from 2013 to 2014 makes this ripe for investment. Finally, given that only select individuals had previously had access to real estate deals of note, crowdfunding opens up this highly viable industry and its high annualized returns to many new accredited investors.
According to a popular infographic by alltop.com – http://holykaw.alltop.com/crowdfunding-where-will-we-go-from-here-infographic worldwide in 2014 crowdfunding will contribute to the creation of 270,000+ jobs and $65 billion injected into the economy. And that is after only a very short time in existence and the US is only now ramping up its economic muscles….
Dr. Rickel is a Senior Advisor at RAZR with executive experience across multiple industries. Member of CFIRA, NLCFA. Todd can be reached at $Doctor@razr.com.