The first hurdle for equity crowdfunding is educating people on what it is.
Only 29 percent of Americans have heard of the funding method, in which individuals donate cash in exchange for a portion of a company, according to a new survey of 1,000 people. The research was conducted by a third party on behalf of equity crowdfunding company NextGen Crowdfunding after the Securities and Exchange Commission voted to approve Title III equity crowdfunding rules on October 30.
Accredited investors, or those individuals with sufficient levels of wealth and assets, have long been able to participate in equity crowdfunding. The new rules from the SEC allow anyone with the cash and desire to do so to participate in equity crowdfunding. The rules are due to go into effect in May.
Even though less than a third of survey respondents reported that they had heard of equity crowdfunding, 70 percent said that they would consider making an investment in this way, according to the research.
“While people are still learning about equity crowdfunding, there’s clearly broad interest in it,” said Aubrey Chernick, founder of NextGen Crowdfunding, in a statement announcing the release of the survey results. “We see a big opportunity to simplify the process and help individuals and businesses participate in this new era of crowdfunding.”
In addition to aggregating equity crowdfunding campaigns, NextGen Crowdfunding hosts in-person events and publishes online content to educate the public about equity crowdfunding.