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Will Equity Crowdfunding Overtake Angel and VC?

The World Bank estimated that crowdfunding would reach $90 billion by 2020. If the trend of doubling year over year continues, we’ll see $90 billion by 2017.

To put that in perspective, venture capital averages roughly $30 billion per year and in 2014 accounted for roughly $45 billion in investment, whereas angel capital averages roughly $20 billion per year invested.

By 2016 the crowdfunding industry is on track to account for more funding than venture capital, according to a recent report by Massolution.

Just five years ago there was a relatively small market of early adopters crowdfunding online to the tune of a reported $880 million in 2010.

Fast forward to today and we saw $16 billion crowdfunded in 2014, with 2015 estimated to grow to over $34 billion.

In comparison, the VC industry invests an average of $30 billion each year.

Meanwhile, the crowdfunding industry is doubling or more, every year, and is spread across several types of funding models including rewards, donation, equity, and debt/lending.

And now under new laws enacted in 2013, equity crowdfunding has sprung forth as the newest category of crowdfunding and is further accelerating this growth and disruption. (source Chance Barnett, Forbes)

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