The online fundraising landscape has evolved significantly in recent years, making capital raises an increasingly strategic tool for businesses seeking growth. Equity capital, as a non-debt financing option, plays a crucial role in this process by allowing businesses to raise funds through issuing shares or engaging with investors. The rapid evolution of the industry has happened so quickly, and new trends in capital raising pop up constantly. While it is great to follow these trends as they happen, it is better to keep ahead of them and position yourself as a frontrunner in your industry. Staying ahead of the curve makes you a leader and gives you the opportunity to change and challenge your industry landscape. Building relationships with future investors can enhance your credibility and offer strategic guidance. Let’s explore how the landscape of online capital raising is changing and take a look at what the future may hold.

Understanding Capital Raising

Definition of Capital Raising

Capital raising refers to the process of obtaining funds or capital to support the growth, development, or expansion of a business. This can be achieved through various means, including equity financing, debt financing, venture capital, and crowdfunding. Equity financing involves issuing shares to raise funds, while debt financing entails borrowing money that must be repaid with interest. Venture capital, on the other hand, involves securing investments from venture capital firms that specialize in funding high-potential startups. Crowdfunding leverages the power of the internet to attract small investments from a large number of people.

Capital raising is a crucial aspect of business development, as it enables companies to access the necessary funds to invest in new projects, expand their operations, and increase their market share. By understanding the different methods of raising capital, businesses can choose the most suitable approach to meet their specific needs and objectives.

Importance of Raising Capital

Raising capital is essential for businesses to achieve their growth objectives and stay competitive in the market. It provides companies with the necessary funds to invest in research and development, marketing, and hiring new talent. Additionally, capital raising can help businesses to improve their financial stability, reduce debt, and increase their cash flow. By raising capital, companies can also attract professional investors, such as venture capitalists and angel investors, who can provide valuable guidance and support to help the business grow and succeed.

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In the context of early-stage startups, capital raising is particularly important, as it enables them to secure the necessary funds to develop their products or services, build their team, and establish a strong market presence. Venture capital firms and angel investors play a crucial role in supporting early-stage startups, providing them with the necessary funding and guidance to help them grow and succeed.

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In summary, capital raising is a critical aspect of business development, enabling companies to access the necessary funds to invest in growth, improve their financial stability, and attract professional investors. By understanding the importance of capital raising, businesses can make informed decisions about their funding strategies and achieve their growth objectives.

Regulatory Changes on the Horizon

Potential SEC Updates

There are many potential changes to fundraising limits and regulations coming in 2025 now that the chair of the SEC has resigned, and incoming chair is spectulated to be Paul Atkins, a former SEC commissioner. The prevailing prediction is that Atkins will loosen some regulations and restrictions, particularly those having to do with private equity and cryptocurrency markets.  

Global Regulatory Environment

The international landscape is constantly changing, with many factors influencing fundraising here in the States. Tax policies, currency fluctuations, and cross-border investment regulations are just some factors that can easily sway how fundraising efforts go. The additional variable of the new presidency will also influence these factors.

Global regulatory changes can significantly impact accredited investors, as different regulations may alter the pathways available for raising funds.

Technological Innovations

Artificial Intelligence (AI)

AI is constantly being implemented in new ways across industries. AI is being utilized in a few different ways to help bolster the fundraising and investing processes, including attracting investors, finding the best potential investors, and tailoring personalized communication. Utilizing data analytics to enhance the accuracy of identifying investor behavior trends and designing customized content and messaging for investors are just two common ways that AI can be implemented in online capital raising.

Blockchain and Tokenization

Changing landscapes means emerging technologies in fundraising. The tokenization of assets on the blockchain is becoming more widely utilized – even at institutional and governmental levels. Institutions have been digitalizing their assets and securely trading and investing via multiple avenues utilizing this technology. Both Blackrock and Franklin Templeton have launched mutual funds using tokenized assets. Looking into 2025, experts are predicting that global markets will be far more seamlessly connected using blockchain technology and tokenized securities. Blockchain technology can also be used to raise capital by enabling companies to issue tokens as a form of equity or debt financing, providing new avenues for securing funding.

Enhanced Data Security

Unfortunately, cybersecurity attacks are becoming more and more commonplace, with user data being an incredibly sought-after commodity. New and improved methods of protecting data have been, and will continue, to come out as issues with data security are identified. One recent cybersecurity trend is the use of integrated security systems. Utilizing an integrated cybersecurity system that works seamlessly with your existing systems increases the effectiveness of the utilized security measures. Cloud-based cybersecurity systems are also rising in popularity, since companies can monitor and process all data in one centralized location. These two trends, in conjunction with monitoring systems and malware or spyware identification systems, are being put to work to protect user data. Additionally, businesses must secure against financial obligations such as interest payments, which can impose a burden during challenging economic conditions.

Changing Investor Behavior and Venture Capital Firms

Rise of Retail Investors

Raising funds has never been easier, and with the rise of online brokerage platforms, far more of the investment landscape is made up of individuals rather than large funds and institutional investors. The demographics have drastically shifted since the markets have opened up to investors that would have previously been excluded from the market.

Impact of Social Media

Social media has become so vast and filled with small, niche subcultures dedicated to every aspect of day-to-day life, including investment. Communities focused on investment and finance on platforms like Instagram, TikTok, X (formerly Twitter), Reddit, and many others have popped up, as well have investment influencers. These communities and influencers make suggestions and predictions that influence what people choose to do with investing capital. Many of the new retail investors come armed with information gathered from these online spaces and invest based on what they find online.

Additionally, businesses can leverage social media to raise money for various purposes, such as starting up, expanding, or transforming, by reaching a broad audience and engaging potential investors.

Environmental, Social, and Governance (ESG) Investing

ESG Investing, which stands for Environmental, Social, and Governance, is investing and screening companies based on criteria centered around how a company interacts with the environment, how they treat their workforce and clientele, and administration practices, like audits, executive pay, and shareholder rights. Investing based on ESG criteria focuses on investing more ethically, where often investors are focused on sustainability and working towards a sustainable future, which impacts the industries and companies they choose to funnel capital into. Many investors are enthusiastically investing in companies that have high ESG scores and are hoping to create more positive effects on society and the environment. Companies focused on ESG criteria might prefer to raise capital through equity rather than borrow money.

DealMaker's Role in Shaping the Future of Equity Financing

Innovation Initiatives for Raising Capital

DealMaker is shaping the future of capital raising with new developments in its platform. These DealMaker innovations include the new reservation campaigns option, where companies of any size can gauge investor interest, have continuous community engagement, and have continuous capital formation. Using the self-serve page builder function gives control of the reservation campaigns to the company founders directly, allowing for the creation of professional-grade pages without the need for technical expertise. New innovations like these are going to change the landscape of online fundraising trends and will continue to further DealMaker innovations in the future.

Thought Leadership

DealMaker’s innovations and contributions to the investment industry make them industry leaders. DealMaker is working to reinvent the traditional relationship between investors and companies by shifting from fundraising to continuous community building and increasing access to sophisticated fundraising tools, and changing the very infrastructure of fundraising. By enhancing “test the waters” capabilities, including integrating built-in tools for ongoing investor engagement and communication, DealMaker is actively creating the next fundraising infrastructure. Additionally, DealMaker is looking to incorporate AI assistance and expand payment and security features.

Conclusion

The capital raising industry has changed drastically in the past few years and will continue to do so going forward. Embracing these changes and new innovations is key to fundraising success. While staying on trend in real-time is great, it is better to stay ahead of the curve. Partner with DealMaker today to be among the first to integrate the latest and greatest innovations into your online capital raising campaigns.

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