Korea Capital Market Institute

Since 2012, more countries around the world have made steps to legalize and regulate equity-based crowdfunding, leading to rapid worldwide growth in the market annually. Although equity-based crowdfunding represents just 5.6% of the global crowdfunding market, its percentage of the crowdfunding market will likely continue to increase, allowing for supportive government policies across countries. Korea’s equity-based crowdfunding market has also seen dramatic growth with a nearly 60% increase in both the number of successful campaigns and the amount of money raised since the relevant legal regime was put in place in 2016. In the entrepreneurial capital market dominated by venture capital firms and angel investors, however, it is too early to be optimistic about the possibility of equity-based crowdfunding, yet still fledgling, being taking root as a new avenue for startup financing. Sustainable growth in the market takes efforts to clearly identify and improve or address the distinct benefits and potential risks of equity crowdfunding as a new participant in the entrepreneurial capital market.