Crowdfunding

Taxes and Crowdfunding

Taxes and Crowdfunding

While crowdfunding is becoming more and more common, tax support and guidance for the campaign creators continue to remain unclear on many points. At a minimum, the tax treatment of funds generated through crowdfunding depends on whether the campaign is reward-based, donation-based, or equity-based. Moreover, if it is reward-based, the value of any reward offered

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Information Asymmetry in Equity Crowdfunding

Information Asymmetry in Equity Crowdfunding

When it comes to equity-based crowdfunding, start-up investments are characterized by a high degree of information asymmetry between the entrepreneur and the investors. To obtain a positive return, investors need to accurately assess both the qualifications and ability of an entrepreneur. They also need to accurately assess the potential of the entrepreneur’s idea. Traditional institutional

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Some Equity-Based Crowdfunding Statistics

Some Equity-Based Crowdfunding Statistics

CrowdCube is the largest equity-based crowdfunding platform in the United Kingdom. Since its founding in 2008, it has facilitated more than $60 million in transactions to date. Combined, those transactions have involved nearly 88,000 investors and over 140 successfully funded ventures. The average individual equity-based investment was approximately $4,000, although investments ranged from as little

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Crowdfunding 101

Crowdfunding 101

Generally speaking, crowdfunding is divided into creative campaigns, reward-based campaigns, and equity campaigns. In creative campaigns, such as a Michael Moore movie, the backers support the message or the “art” and make donations to help promote the cause. Creative campaigns have been around forever, however reward-based and equity campaigns are relatively new. In reward-based campaigns,

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