Ready to Attract Millennial Clients? Up Your Game With Crowdfunding

In the words of Steve Jobs, it’s time to “think different.” About technology, about your clients, and about your business.


There’s a lot of change going on in the investment world, and roboadvisors and new DOL regulations are just the tip of the iceberg. Perhaps the biggest shift facing advisors today is the emergence of crowdfunding as a major investing opportunity for younger investors. Whether you know a lot or a little about crowdfunding, now is the time to up your game.

The crowdfunding movement was born out of the Great Recession. In an effort to generate new growth, President Obama signed the Jumpstart Our Business Startups Act (JOBS Act) in 2012, and it revolutionized capital raising for startups. It also revolutionized investing for individuals.

Crowdfunding is currently forecast to account for more funding in 2016 than all of venture capital combined.


That’s a game changer. For advisors, crowdfunding is poised to have a huge impact on your business model—and your revenue—unless you take time now to learn about it and turn it into an advantage before it becomes a threat. If you’re not convinced crowdfunding is coming your way, consider the following:

  • Crowdfunder , “the first truly diversified fund for early-stage startups,” invests in startups backed by top VCs in the index—at their same terms. Once the fund invests, select fund investments are shared with the investor network online. By offering a greater magnitude of diversification than traditional VC firms, Crowdfunder is able to capture early-stage market returns and deliver them directly to investors.
  • On the popular crowdfunding site IndieGogo , Honey Flow, an Australian beehive maker, recently grabbed headlines for being the fastest campaign to reach $1M—and then $2M. With an initial startup goal of $70,000, after 15 minutes on Indiegogo , they'd raised $250,000. They’re currently the most successful crowdfunding campaign ever launched outside the US.
  • At the end of 2015, Fundrise , a real estate crowdfunding platform, introduced its Income eREIT. The response from investors was swift and dramatic. By March 2016, the company had raised $23.4M in settled subscriptions. The company’s goal is to “give everyone the opportunity to invest directly in high quality real estate, without the middlemen .” Today, there are more than 80,000 members of Fundrise totaling nearly $3 billion worth of real estate investments.
  • Crowdfunding site Kickstarter is now launching more books than all but the largest publishers. One of the most notable successes is Rebel Girls , a children’s book that tells the stories of 100 inspiring women by introducing young readers to role models from the Brontë sisters to Serena Williams. One hundred and forty days after launch, the campaign hit $1M in pre-orders, making it the biggest publishing project in Kickstarter’s history.
  • Stratifund provides an independent, unbiased, centralized source of information about equity crowdfunding deals to let anyone invest in startup companies: Without a broker-dealer, and (are you paying attention?) without an investment advisor. According to the company’s website, Stratifund delivers independent research, easy-to-read reports and “all the info you need, with none of the fluff.”
  • What does the recent uptick in crowdfunding platforms and successes have to do with your advisory business? A lot.

    Especially if you are hoping to attract and work with Millennials to grow your practice.


    According to a 2015 survey by Capital One ShareBuilder , 93% of Millennials stated they were wary of the public markets. They lack trust in the markets and they lack knowledge when it comes to investing in stocks. It’s no wonder Millennials lack trust in the markets -- they watched their parents suffer through the stock market crashes of 1987, 2001, and 2008, and it wasn’t pretty.

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    Financial literacy is also a problem. But, as with most challenges faced by this demographic, their response is to turn to technology as a safe haven. Keep in mind that Millennials are on deck to inherit an estimated $30 TRILLION, and they’ll be tomorrow’s biggest earners as well. Combine their love of technology, their lack of trust in the markets in general, and their need to invest, and crowdfunding is sure to play a significant role in their financial futures.

    As an advisor, your goal is to attract as much of those assets into your practice as possible, and that requires helping Millennials reach their goals on their own terms . How can you add value when Millennials are able to access so much online and, as the crowdfunding websites promote, cut out the middleman? (Hint: That middleman is often you .)

    Begin by making it your mission to stay informed about what’s happening in the crowdfunding space. Spend just 30 minutes each week on sites like Crowdfund Insider and the crowdfunding due diligence site Crowdd . Check out the top crowdfunding blogs like Ayudos , Early Investing , and the Crowdability blog .

    Perhaps most importantly, have conversations with Millennials about how and where they plan to invest. Then share what you’ve learned and keep your ears open for new information. The more you know, the more value you can add. And that is precisely how every advisor earns the trust—and the business—of the clients of tomorrow.