P2PL and crowdfunding platforms have been on the rise for several years now, but 2016 is set to be the year in which the use of crowdfunding for startup businesses absolutely skyrockets.
The use of crowdfunding platforms for startups is a fairly new yet well-received technology. Crowdfunding enables practically anyone to appeal to the internet to invest in their business or fundraising idea. Rewards are often offered for those who do choose to back the project. This simple and innovative payment method is already expected to thrive in 2016, but it’s possible that it may surpass other funding methods altogether.
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A 2015 report by Massolution shows that over $34 billion was crowdfunded in 2015, beating venture capital (VC) by over $4 billion. With the year before it seeing only $16 billion being crowdfunded, there’s no doubt that the amount injected into crowdfunding will further increase in 2016.
Juniper Research recently reported that technology sector crowdfunding investments in particular will increase from $1.1 billion in 2015 to a staggering $8.2 billion in just 5 years.
The launch of the JOBS (Jumpstart Our Business Startups) Act in 2012 allowed less sophisticated investors to participate in crowdfunding for startups in America, which began the surge of crowdfunding that has occurred over the last few years. It’s highly likely that many more countries will follow the example of the US. Bearing this in mind, and the aforementioned statistics, who knows how popular crowdfunding will become in the next decade or so?