Struggling small businesses are flocking to crowdfunding to raise capital

A pandemic-fueled boom in crowdfunding has small businesses flocking to capital-raising platforms that experts say could help many companies get back to normal — as long as small-business owners are able to launch effective campaigns.

Regulation crowdfunding, in which companies raise capital from investors via government-monitored online platforms, has mushroomed in the last two years, going from approximately $100 million in 2019 to over $200 million in 2020, according to Chris Lustrino, founder and CEO of crowdfunding analytics and ratings firm KingsCrowd. It’s already exceeded the $200 million mark year to date in 2021, he adds.

“COVID has been a massive boon to this market,” Lustrino says.

Read: Small businesses still need support—5 ways you can help them recover

When the pandemic disrupted traditional financing options, more small-business owners began looking for alternative funding sources; that made them more open to the ideas…

Read more…