Equity crowdfunding is defined as the offering of securities by a privately held business to the general public, usually through the medium of an online platform. The model permits anyone to acquire a share in privately held businesses, i.e. those that have yet to float on a stock exchange, by allowing a business to offer a certain proportion of its equity for a set amount of capital it is aiming to raise. investors can then, through the platform, buy small parts of this equity stake.It’s worth noting that angel investment platforms such as AngelList and CircleUp are excluded from this definition. While they provide huge value to the ecosystem and increase the density of network amongst startup and angel investors, they don’t unlock new sources of funding and don’t face the barriers of equity crowdfunding when dealing with a large number of non-accredited investors. The motivation for equity crowdfunding as an investment is intrinsic, driven by a combination of social and financial return.
For the purposes of the report, Equity Crowdfunding is defined as follows: