Crowdfunding to Overtake Venture Funding by 2058??

The year is 2058. There’s flying cars, AI robots patrol the streets, and The Big Bang Theory is SOMEHOW still the #1 show in America.

(You’re also rich beyond belief because you read this newsletter 😉)

2058 is also the year that equity crowdfunding might overtake venture funding in terms of dollars invested. Well, maybe…it’s a lot more complicated than that.

Venture Capital Funding Took a Dive in 2022

CB Insights recently dropped their annual report on the state of venture capital. The 279 page document recaps investment data across the industry in 2022

• As a quick refresher, venture capital funds (like Sequoia, Andreesen Horowitz), are companies that invest in private companies using funds given to them by pension funds, sovereign funds, endowments, and high net worth individuals

The report shows that US VC funding declined 37% to $198B in 2022.

2021 was a turbo-charged economic year, and any YoY comps are going to look bad. But what’s interesting to see here is that equity crowdfunding now makes up a greater percentage of venture funding than it did in 2021.

Equity Crowdfunding increased its presence in relation to venture funding. moving from 0.31% of ventures up to 0.35%.

I know, this doesn’t seem like groundbreaking figures, but this is a multi-billion industry and it takes a lot to move the needle

Equity crowdfunding’s numbers were also down in 2022, but they were down by a lesser percentage (-26%).

And if we use extremely flawed math to carry forward this trend, equity crowdfunding would surpass venture funding by 2058. The reality is this won’t happen, but I don’t think it’s crazy to see crowdfunding make up 5%+ in twenty years.

The Next Wave of Startups will be Focused on AI…

I wrote a Twitter thread about where I want to place my money within the AI category. Spoiler Alert: it’s not in the places that have been getting all the attention.

Read the thread here.

A look ahead…

Next week I’m going to give my full rating for an exciting startup that just launched.

Here’s some quick hits on their business:

• Functional product that’s been shipped product to hundreds of customers

• Potential to be the next Theragun

• Early Bird investing discount still in effect

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