Equity Crowdfunding is Adapting as Startups Evolve

Traditional crowdfunding efforts are SEC-regulated. This means that startups agree to have current and projected financials reviewed, and provide a list of employee roles and responsibilities.  By participating in the review process, startups can market and publicize fundraising efforts.

But then the kid on the block, Initial Coin Offerings (ICOs), allowed startups to bypass regulations and raise funds by selling unique tokens or coins in exchanges for cryptocurrencies like bitcoin. The absence of oversight has made ICOs controversial and has led some equity crowdfunding platforms (such as StartEngine) to offer SEC-registered ICOs. These adaptive efforts deliver the security benefits of a blockchain digital ledger while offering potential investors equity.

Fads don’t stick around – a trend, like equity crowdfunding, is a tool that solves problems. It also becomes more valuable and relevant over time.