By Aaron Mendez, Co-founder & CRO of Issuance Inc.
Innovations stemming back to the 2012 JOBS ACT in the rules and regulations governing the issuance of securities have laid the foundation for expanded access to alternative investments (alts) amongst retail investors, including both accredited and non-accredited investors. Put simply, now anyone can be an investor and access assets once limited to just a small segment of the US population.
From startups, to real estate, to art and collectibles, a broad range of alternative asset types have emerged over the last several years, creating more options for the retail investment community as a result.
It’s no surprise that with the rise of new investment platforms, the popularity of alts is quickly growing; but there are several other key trends that are driving an increased demand for alts. One example is a new cast of investment aggregators that are helping bring new investors to the market by helping investors discover investments and make more informed investment decisions.
Similarly, a growing number of individuals and accredited investors are participating in private offerings as a result of the increasing availability and simplicity of fund and SPV formation, which make it easier for investors to syndicate deals, pool funds, and invest alongside friends, colleagues, and many others.
Personal networks, preferences, and expectations of higher yields all appear to be fueling interest for alts and early-stage investments at an accelerating rate, not to mention uncertainty in public equities, previously one of the few investable asset classes for retail individuals.
The amalgamation of all these factors has led to exponential growth in popularity and demand for alts amongst both accredited and non-accredited investors, which all means greater access to capital for issuers.
According to the SEC, in the 12 months ending July 2021, a total of $124B was reported raised in Reg D 506(c) offerings, $1.7B in Reg A offerings, and $174M in Reg CF offerings. The median raise amount across each offering type for that period was $850K, $2.3M, and $130K, respectively. In comparison, $2.4 billion in proceeds was reported raised in Reg A offerings by 183 issuers between June 2015 and December 2019, approximately.
About Issuance Inc.
Issuance is a technology company, our platform enables startups to raise capital from both accredited and non-accredited investors. In aggregate, our customers have raised over $250 million. To learn more, please visit issuance.com