Market Insights Financial Capital Raising Digital Capital Raising

Reward-Based Crowdfunding - United States

United States

The total transaction value in the Reward-Based Crowdfunding market is expected to reach €0.43bn in 2024.
When compared globally, the highest transaction value is achieved the United States (€0.43bn in 2024).
In the United States, Crowdfunding platforms continue to disrupt the Capital Raising market, democratizing investment opportunities for a diverse range of investors.

Key regions: Germany, Brazil, Australia, Israel, United States

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Analyst Opinion

The Crowdfunding market in United States has experienced significant growth in recent years, driven by customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in the United States have shown a strong preference for crowdfunding as a means of supporting innovative projects and startups. This preference is driven by the desire to be part of the creative process and to have a direct impact on the success of a project. Crowdfunding platforms provide individuals with the opportunity to contribute financially to projects that align with their interests and values, giving them a sense of ownership and involvement.

Trends in the market: One of the key trends in the Crowdfunding market in United States is the rise of equity-based crowdfunding. This allows individuals to invest in early-stage companies in exchange for equity, giving them the potential for financial returns if the company is successful. This trend has been fueled by regulatory changes that have made it easier for startups to raise capital through crowdfunding. As a result, more entrepreneurs are turning to crowdfunding as a viable alternative to traditional funding sources such as venture capital. Another trend in the market is the increasing use of crowdfunding for social causes and charitable projects. Individuals are using crowdfunding platforms to raise funds for a wide range of social initiatives, from disaster relief efforts to community development projects. This trend reflects a growing desire among individuals to make a positive impact on society and support causes they believe in.

Local special circumstances: The United States has a well-developed entrepreneurial ecosystem, with a large number of startups and innovative projects. This provides a fertile ground for crowdfunding, as there is a constant demand for capital to support these ventures. Additionally, the United States has a large population of tech-savvy individuals who are comfortable using online platforms for financial transactions, making it easier for crowdfunding platforms to reach and engage potential backers.

Underlying macroeconomic factors: The strong economic growth in the United States has created a favorable environment for crowdfunding. As the economy continues to expand, individuals have more disposable income to invest in projects they believe in. Additionally, low interest rates have made traditional investment options less attractive, leading individuals to seek alternative investment opportunities such as crowdfunding. In conclusion, the Crowdfunding market in United States has seen significant growth due to customer preferences for direct involvement in innovative projects, trends such as equity-based crowdfunding and social causes, local special circumstances including a strong entrepreneurial ecosystem and a tech-savvy population, and underlying macroeconomic factors such as economic growth and low interest rates. This growth is expected to continue as crowdfunding becomes an increasingly popular and mainstream method of raising capital.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.