SEC Releases White Paper On Crowdfunding

On February 28, 2017, the SEC released a white paper analyzing crowdfunded offerings during the first six months following the effective date of Regulation Crowdfunding (May 16, 2016). The white paper noted that crowdfunding has thus far been attracting issuers that have not extensively utilized Regulation D. Despite a relatively small sample size and a short observation period, the white paper makes, among others, the following observations:

There were 163 separate offerings by 156 issuers, seeking a total of approximately $18 million, excluding withdrawn offerings. The median offering amount was $53,000 and the average offering amount was approximately $110,000. However, almost all of the offerings accepted oversubscriptions up to a higher amount (typically close to $1 million) for a total amount of approximately $101 million. As of January 15, 2017, approximately $10 million in proceeds was raised in 33 offerings by issuers filing a Form C-U. The median amount raised in these offerings was $171,000 and the average amount raised was approximately $303,000. For offerings initiated in 2016, 24 were withdrawn by issuers or associated with an intermediary whose FINRA membership was terminated and funding portal registration withdrawn. These offerings sought a total of approximately $2.3 million (approximately $19.5 million if oversubscriptions are included). Most of the offerings solicited in all states. The most popular type of security was equity, followed by "simple agreements for future equity" and debt. The most...