Back in 2011, before the passage of the JOBS Act, traditional fundraising was incredibly slow and challenging for entrepreneurs.  It was the primary reason that most entrepreneurs threw in the towel before they even got started.  

Antiquated U.S. securities laws prohibited 98% of Americans from investing in startups, and only the wealthiest, most connected individuals had any real access.  At the same time, platforms such as Kickstarter were emerging, and it became clear to a handful of us that the Internet would revolutionize startup fundraising and investing.  So a decade ago, we came to Capitol Hill with a simple vision: “what if entrepreneurs could utilize the Internet to raise capital?”. 

The ultimate passage of the 2012 JOBS Act changed 80-year-old U.S. securities laws to make it possible for entrepreneurs to raise capital over the Internet and provided millions of Americans access to startup investing for the very first time.  

It was a herculean effort to get the bill brought to the House floor, signed into law, and ultimately implemented by the SEC, all without any professional lobbying firms and in a bipartisan fashion.  And the JOBS Act touched more than just startups, it also opened the door to moving real estate and other alternative asset classes online.  When we look back on the JOBS Act in a couple more decades, it will likely go down as one of the most disruptive changes to U.S. securities laws in our lifetimes.

Over the past decade, our emerging industry has accomplished quite a lot.  Crowdfund Capital Advisors expects that, in 2022, more than one million investors will deploy over $1 billion into U.S. startups through online investment platforms.  Over the past few years, this new form of capital raising has funded thousands of companies and created hundreds of thousands of jobs.  And on the investor side, ordinary people are now getting a chance to access opportunities years before the IPO.  Earlier this year, Heliogen went public at a $2 billion valuation, rewarding over 900 retail investors who invested four years earlier on SeedInvest at a $20 million valuation. 

Online fundraising is still in the first out of the first inning.  There is meaningful work to be done and significant future potential.  Online capital formation is just starting to go global.  Our portfolio company, Crowdcube, has deployed over $1 billion into thousands of companies in the U.K. and is now expanding rapidly throughout Europe.  In addition, we have yet to see a vibrant marketplace for early-stage startup equity that unlocks liquidity on a mass scale.  Lastly, we are just beginning to see the convergence of startup fundraising and blockchain technology which has the potential to deliver a completely new infrastructure for finance and investing.

It has been one hell of a journey over the last decade and I can’t wait to see what the next ten years will bring.

-Ryan Feit, CEO and Co-Founder of SeedInvest