It's been a tumultuous year for both the public and private markets. Compounded with higher cost of borrowing and inflation impacts, the macroeconomic trends have been a lot of doom and gloom.
There is one sector that saw +16% growth in 2022, and one vehicle specifically that saw +21% growth.
We are talking about Equity Crowdfunding.
If you look at the Private Markets, and compare deal counts for Venture Captial and Exit Activity, everything has been 'paused' and analysts are predicting that pause to hold until Q3 2023.
But the 14% decrease YoY doesn't tell us about the trendline for VC, which is much more drastic. December of 2022 compared to the same month in 2021 saw a 41% decrease in deal counts. Seems like VCs are pumping the breaks.
However, the need for founders to have runway and raise capital does not go away.
The good news is that Investor sentiment for the public markets is bearish, but according to a survey by Crowdfund Insider, there are many investors eyeing the private markets to 'get in early'.
This bodes well for a continued growth in Reg CF deals, as founders take advantage of investors looking for other diversification options. Reg CF's popularity continues to gain, with a 21% YoY growth in deal counts.
In 2022, it was rare indeed to see anything in the green, nevermind a 21% growth. With rumours of the House Financial Services Committee holding hearings this year on Jobs Act 4.0, there could be even more opportunity in the space as some of the recommended innovations could come to pass.