Have you heard the big news for the equity crowdfunding market?
Late last week, blockchain startup Circle, which has raised over $246M to date and is considered a market leading crypto management and investment platform, acquired equity crowdfunding portal, SeedInvest for an undisclosed amount.
As a reminder, SeedInvest is one of the leading equity crowdfunding portals having raised over $115M for 150+ startups and has an investors base of 200K+ individuals.
We think the fact that Circle has agreed to acquire SeedInvest is a sign of major momentum for the equity crowdfunding space.
Why crypto securities aren’t so crazy…
When many of you hear crypto and equity crowdfunding I know it gives you goosebumps and discomfort, but we actually believe this can be a net-positive for investors over the long term.
Reason being, one of the largest complaints from startup investors is the lack of liquidity in the startup market. Cryptocurrency securities, put simply will create liquid markets for startup investment trading.
AKA, those 8 to 10 year timelines everyone hates will only be a thing of the past in a world where cryptocurrency securities are widely adopted.
With 3 of the top 5 equity crowdfunding players (SeedInvest, StartEngine, Republic) now moving towards being fully functional in managing cryptocurrency securities, we think we will see elevated adoption of this type of capital raising from startups.
What Circle brings to the table
Circle, will enable SeedInvest to access the large and diversified user bases already utilizing the Circle Invest platform and provide investors with secondary market liquidity on Circle’s digital asset exchange.
We look at Circle as an entry point to access hundreds of thousands if not millions of users who are not paying attention to the equity crowdfunding market. This acquisition will make platforms like SeedInvest mainstream and bring heightened attention to the equity crowdfunding space.
With more eyeballs and hastened growth in the regulated equity crowdfunding market due to this acquisition we think it will bring more startups and investors to not only SeedInvest but to the market in its entirety.
Perhaps this is the answer to a tokenized economy???
We saw that when ICOs took off without regulation that there was corruption, fraud and total disaster. Which is why the equity crowdfunding portals are such perfect partners for crypto platforms like Circle. SeedInvest brings to the table all the tools to manage compliant capital raises from both accredited and non-accredited investors.
Meanwhile, crypto platforms like Circle provide the ability to create liquid markets through cryptocurrency securities and exchanges. If these worlds can come together we can have an accessible, well regulated, liquid market for startup investing, which completely revolutionizes startup capital raising for investors and founders.
As Jeremy Allaire puts it cryptocurrency securities will become, “A major new category of securities that ultimately every business is going to adopt, just like every business has a website.”
Love it or hate it…
Love it or hate it, the rise of blockchain and crypto asset solutions for investing are inevitable and we appreciate the equity crowdfunding portals being tuned into this reality.
Rather than fall behind, we think this will further solidify these platforms as market leaders in startup investing for a long time to come.
Well done to the SeedInvest team on making this happen and here is to continued momentum and growth for the equity crowdfunding space. If you have follow up questions regarding our views on this acquisition, please do let us know at email@example.com.
About: Chris Lustrino
A Boston College Eagle for life, on a mission to democratize startup investing for all people at KingsCrowd, with a passion for Fintech, investing, social impact, doing well and doing good, and an avid runner, cyclist and writer.