Crowdfunding has come a long way. Equity crowdfunding is picking up steam worldwide, including such unexpected places as China, the MENA (Middle East-North Africa) region, and Mexico. Then there’s marketplace lending, a niche that is expanding almost as quickly as the universe itself.
In the U.S., there’s still plenty of room for growth. Crowdfunding is picking up speed like the westward march of Manifest Destiny even as ever-widening black holes call out for new stars to emerge. But what are those niches that need to be filled?
Where the Opportunities Are for New Crowdfunding Players
- Athletics – While there are several sports-related crowdfunding platforms, most of them are focused on individual athletes raising money for training—like MakeaChamp—and athletic teams raising funds for operational expenses with platforms like Rallyme. What about crowdfunding for new sport innovation, franchise expansion, and infrastructure development for teams and leagues?
- Energy – The majority of energy-related crowdfunding is geared toward renewable energy (Gridshare, for instance), yet there is a ton of potential for traditional energy sources. As we speak, Japan is deregulating its energy markets. What a ripe opportunity for companies to raise equity on the international competitive landscape. Today, it’s Japan; soon, it will be all of Asia.
- Public Projects – Traditionally, local municipalities funded community projects by issuing bonds or raising taxes. Thanks to crowdfunding, smaller projects for which it isn’t practical to issue a bond and for which a tax increase would result in revenue-generating overkill can be funded alternatively through donations. Citizinvestor comes to mind in this sector.
- Investing – Equity crowdfunding has allowed accredited investors unique opportunities while providing businesses a more direct way to reach venture capitalists, but non-accredited investors have been shut out until recently. Title III of the JOBS Act opens doors for crowdfunding platforms to specialize in this new investor market or incorporate it into their business plans. MicroVentures is among the first to tap this market.
- Local Crowdfunding – As of today, only 30 states have made provisions for intrastate crowdfunding. There is certainly room here for further growth, and it’s highly likely that we’ll see some hyper-local and niche-specific opportunities in those states where the intrastate crowdfunding gates have already opened. Kansas led the way on this in 2011.
- Legal Funding – There have been a few crowdfunding sites pop up that allow people faced with legal challenges a way to meet the costs of their legal bills. That includes Mighty, a site specializing in lawsuit investing. Investors put money into personal injury cases and if the plaintiff wins, the investor gets a part of the proceeds. If the plaintiff loses, they lose their investment. There’s plenty of room for further specialization in legal crowdfunding.
- Science – We live in an age when billionaires are launching their own space programs. The Thomas Edisons of the world will always need financiers. From biotech and cancer research to new discoveries in every scientific discipline, small unfunded scientists slaving away in their garage labs, or at universities, should be able to ask for public support from people with a real interest in those fields. Experiment.com is leading the way into science funding.
Anyone who thinks crowdfunding has reached its limit, should take another look. From real estate (Sharestates) to virtual currencies like StartCOIN, innovation in finance is on the rise. We’ve only hit the tip of the iceberg where crowdfunding is concerned.