If you like crowdfunding, you probably have a lot of questions on your mind regarding this fundraising system. One of the most common questions relates to the amount of money you can raise on a crowdfunding platform. In this article, we will answer this question. Read on to find out more.
On the web, you’ve probably gone through the insights and experiences of industry leaders, experts and fundraisers. But for the maximum amount, it can be up to millions of dollars. So, the question is, what is the average amount of capital that can be raised through crowdfunding?
First of all, the regulatory authority is responsible for setting and regulating and setting limits on how much capital can be raised. Official crowdfunding platforms offer their services following special rules, and they do not exceed the maximum amount of money collected through the portal.
Generally, they state these limitations in the FAQ section or on webpages on crowdfunding platforms. Given below are some statistics:
Prior to 2021, startups were allowed to raise $1,070,000 per year under the Crowdfunding Regulations. However, the limit has been increased to $5 million, which is good news for beginners.
If you follow Rule D, you can raise as much money as possible from accredited investors. Some platforms like Wefunder allow you to run A+ Regulation campaigns, free of charge. And you can raise up to $1 million at most.
Also, if you know nothing about the American regulatory alphabet, you can read the simple terms given below:
Reg A: this allows you to raise between $20m and $75 through a Mini-IPO, which is ideal for small issuers and young companies.
Reg D: It consists of a set of rules for large campaigns and projects that require an unlimited flow of funds. In such deals, only the big players can take part.
Reg D: it enjoys more popularity unlike debt and public equity offerings. Generally, these campaigns are run through private funds, technology companies, and real estate.
Reg CF: This is the ideal framework for startups that attract public attention for capital raising.
According to a report released by The Crowdfunder, the average amount raised for each Reg CF offer was $342k in 2020.
Regarding crowdfunding, only the sky is the limit if the limits are not set by the authorities. In fact, the average amount raised via crowdfunding platforms varies depending on the country, platform and niche. So no matter what type of startup you launch, you can start a crowdfunding campaign to raise capital for your business and get it started.