The crowdfunding phenomenon raised $113.52bn only in the last year, according to Pitchbook data, a year-on-year increase of 1,021%. It is being driven by a new breed of investor keen to acquire a stake in private companies, as well as providing those businesses with access to crucial new funding via Regulation CF or Regulation A+ equity crowdfunding.
The key to further growth is the ability for private firms – whose shares are not traded on public exchanges like the Nasdaq or NYSE – to have their equity traded via a secondary market using a regulated Alternative Trading System (ATS) just like public companies.
How can private companies get market foothold?
Now the award-winning, broker dealer Rialto Markets is looking to empower more private companies and their would-be investors, by launching its online Knowledge Hub to aid investors and issuers in their learning from leading Fintech thought leaders.
This provides easy-to-understand online articles and guides for those wanting to learn more about the exciting opportunities on offer. It aims to deliver balanced articles extolling the virtues – and highlighting the risks – for both investors and private company issuers.
It provides guidance on the benefit to investors of holding diverse portfolios to reduce the risks involved, whilst remembering that private securities can be highly illiquid assets.
Rialto Markets’ CEO and co-founder Shari Noonan said: “The Knowledge Hub will be an expanding resource on our website, with a double role; to supply all our clients with plain language, easy access background information, and answers to any queries they may have.”
“And the best part, there’s even a jargon busting glossary of financial terms that any newcomer to the sector might need to help them find their feet, as crowdfunding and the democratization of private securities is set to accelerate in the coming years,” Noonan said.
What is the future of the private securities market?
Rialto Markets also operates a fully compliant secondary market ATS platform which empowers the buying and selling of shares in private companies. This includes equity crowdfunded companies and other forms of private securities including NFTs, crypto currencies and other types of digital assets in a much more regulated environment.
There are 27 million private companies in the United States alone, with many having hundreds if not thousands of individual investors that could take advantage of equity crowdfunding and a regulated secondary trading market for private securities.
Forbes reported that the private securities market would be worth a record $7 trillion last year and forecast that it would hit more than $30 trillion by the end of the decade, driven in part by equity crowdfunding and other digital private securities opportunities.
Rialto Markets’ online Knowledge Hub aims to ensure leaders can support high-growth private companies and smaller retail investors and larger accredited investors through this platform.