Crowdfunding Myths Are Falling Apart

For a long time, people in traditional finance circles have been skeptical about equity crowdfunding, especially under Regulation Crowdfunding (Reg CF). They thought it was a last-ditch effort for companies that couldn't get support from big investors. They saw it as a place for failing businesses and overhyped ideas.

But new data from Crowdfund Capital Advisors (CCA), which tracks all Reg CF offerings, tells a different story. The data shows that crowdfunding has grown up, and the old arguments against it don't hold up anymore.

🤔 Myth #1: Only Desperate Startups Use Crowdfunding...

🚀 Reality: The types of companies using crowdfunding have changed a lot, and the numbers prove it.

When Regulation Crowdfunding started in 2016, most companies were new and risky. About 62% of them hadn't made any money yet, and 73% were less than three years old. They were mostly early-stage businesses with untested ideas.

Now, things are different. By 2025, 64% of companies using Reg CF are making money, and only 46% are considered startups. This change is not just in how they look—it's in the numbers too.

In 2016, the median revenue for these companies was almost zero, and the average was just $277,000. By 2025, those numbers jumped to $439,741 (median) and nearly $2.7 million (average). These are real businesses with real plans for growth.

Also, 22.9% of offerings in 2025 are follow-up rounds, meaning companies are coming back for more funding—not because they're desperate, but because it's part of their strategy. They're using crowdfunding to raise money, engage customers, and boost sales.

🤔Myth #2: Crowdfunded Startups Fail More Often...

🚀Reality: Crowdfunded businesses are more resilient than average.

According to the Bureau of Labor Statistics, about 50% of all U.S. businesses fail within five years. But data from CClear shows that only 25.5% of crowdfunded companies have gone out of business. This shows that crowdfunding is a strong way to raise money.

Many of these companies started without traditional investors, and crowdfunding has helped them prove themselves and attract more investment later.

🤔Myth #3: Issuers Can Easily Misrepresent Their Quality...

🚀Reality: Crowdfunding is very transparent and regulated.

Unlike private fundraising, Reg CF offerings must be filed with the SEC, including detailed information about the business. These filings are public and legally binding.

Investors, who are often experts, closely examine these offerings. They discuss them in public forums, and if a company can't back up its claims, it loses support. This process weeds out weak campaigns and builds trust in successful ones.

🤔Myth #4: Top Startups Avoid Crowdfunding...

🚀Reality: Crowdfunding is now a strategic tool for leading startups and is embraced by venture capital.

Recently, nearly 30% of Reg CF offerings included a venture or institutional investor. This shows that traditional investors are rethinking crowdfunding. They see it as a strategic advantage, not a complication.

Venture capitalists now understand that having many retail investors can strengthen a company's market position. These investors are not just shareholders; they are engaged supporters and marketers.

🤔Myth #5: Crowdfunding Is Too Opaque to Be Taken Seriously...

🚀Reality: The best-informed players in private capital already rely on crowdfunding data.

The CClear dataset, maintained by Crowdfund Capital Advisors, is the only complete and updated source of Reg CF data in the U.S. It includes over 10,000 offerings by more than 8,400 companies, totaling nearly $3 billion in capital commitments.

This data is essential for venture firms, asset managers, and others. Understanding these markets is no longer optional.

The simple truth is: in any market, the best data wins. And in online capital formation, CCLEAR's dataset is a clear advantage.

👉The Rise of the Investomer

At the heart of this change is the concept of the Investomer—a customer who becomes an investor. They bring both money and passion, helping to grow the brand. For many companies, this dual-role stakeholder is more valuable than a distant venture capitalist.

Investment crowdfunding is no longer a novelty. It's becoming a mainstream strategy with a powerful economic logic.

As the data shows, the old arguments against crowdfunding don't match the reality of who's raising money and succeeding in this space.

Yvan De Munck - @regcfrocket

CClear, Inc.