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  1. #1
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    What is the difference between the stock exchange and equity crowdfunding?

    What is the difference between the stock exchange and equity crowdfunding?

  2. #2
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    I think this question have been asked in this forum before.

  3. #3
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    Can you send me the link, please?

  4. #4
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    Okay> I found out the other question was slightly different from the one you asked. But here is the link all the same http://crowdfundingforum.com/showthr...-i-m-a-novice)

  5. #5
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    You might find this interesting too.

  6. #6
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    In most regulatory environments Stock Exchanges are heavily regulated. This is because a “market” is created for the secondary sales or trades of shares. Thus to ensure the market operates fairly rules have developed where no one shareholder can receive advantage over others so that share hawking on rumours doesn't fleece people.

    Stock Exchanges done raise money. Funds are usually raised before listing or off-market.

    With equity crowdfunding it is about the capital being raised on a crowdfunding platform not about a market. By investing people get shares and those shares can be sold but there is seldom a liquid market for shares from a crowdfunding raise.

    So Equity Crowdfunding is about raising capital with minimal stock/share resales

    A Stockmarket is about selling or trading shares that people have already invested in.

  7. #7
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    This video explains how equity is different from buying stock. https://www.fool.com/investing/2017/...-is-diffe.aspx

  8. #8
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    Fundraising Amount
    Funds raised from equity crowdfunding are much lower. For example, Title III offerings in reliance on Section 4(a)(6) of the Securities Act of 1933 (Regulation Crowdfunding) allow companies to raise up to USD 1 million in a 12-month period. Regulation A allows companies to raise up to $50 million. Although there is no limit on fundraising amount for offerings in reliance on Regulation D, Rule 506(c), funds raised in equity crowdfunding are much lower than in stock market.

    Liquidity
    Equity crowdfunding involves investment in private companies. Since there is no readily available secondary market or public stock exchange for the sale of shares purchased through equity crowdfunding, it may be difficult or even impossible to sell your securities purchased from equity-crowdfunding. For example, investments made in a Title III crowdfunding transaction can't be resold for a period of one year and there may be some other restrictions on the resale of the securities, you may not always be able to cash your shares you invested in a private company in quickly or for as much money as you paid.

    Difference in Company Segment
    Companies seek to raise funds in equity crowdfunding are mostly early stage startups. However, companies listed in stock exchanges are mostly mature and established businesses.

    Disclosure Requirements
    The disclosure requirements are less demanding in equity crowdfunding. For example, Title III offerings only require disclosures of financials in the latest two fiscal years and filing up to three annual reports pursuant to Regulation Crowdfunding. Even for Regulation A offerings, the disclosure requirements are less than what you would currently expect from companies traded on stock exchanges.

  9. #9
    Junior Member pro_larsen's Avatar
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    Stock is a portion of ownership in a company.
    Buying stock in a large public company is generally a medium-risk investment, a decent way to get your money working for you, especially if you have time on your side.

    Older investors want to take fewer risks with their money and have less time to see their investments grow. Older investors may be attracted to debt instruments such as bonds, which pay out interest regularly and have a set maturity date. But for people with more time, there are options that can yield higher rewards, with a certain amount of risk.

    Crowdfunding Investment Options

    The Internet made the sharing economy possible, and the financial crisis made it a necessity.

    The spectrum starts with donation-based crowdfunding. You simply give money to a cause on sites. A step beyond that, another websites give people the chance to fund a project for a return on their investment -- a product or prototype -- once the project's funding goal is reached.

    Then there are crowdlending sites, where investors loan money and receive regular interest payments.

    The next step, or leap, is online equity funding at sites, which allow investors to purchase shares directly from start-up companies.

    Online equity investing offers some of the greatest rewards for investors. There's transparency, because you can view a large number of companies from different places and in different industries.

  10. #10
    In most regulatory environments Stock Exchanges are heavily regulated. This is because a "market" is created for the secondary sales or trades of shares. This way to secure/make sure of the market operates fairly rules have developed where no one shareholder can receive advantage over others so that share selling on (stories that may or may not be true) doesn't fleece people. Stock Exchanges done raise money. Money is usually raised before listing or off-market.
    With equity (getting money from lots of people) it is about the capital being raised on a (getting money from lots of people) (raised, flat supporting surface) not about a market. By investing people get shares and those shares can be sold but there is almost never a liquid market for shares from a (getting money from lots of people) raise.
    So Equity (getting money from lots of people) is about raising capital with (almost nothing/very little) stock/share resales
    A Stockmarket is about selling or trading shares that people have already invested in.

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