What is StartEngine?
StartEngine is a crowdfunding platform that allows people to create campaigns and get them funded. It's also an opportunity for investors to invest in startups, with the hope of making money off their investments.
StartEngine was founded by Howard Marks, who was CEO of Activision Publishing Inc., one of the largest video game publishers in the world.
Founded in 2014, StartEngine.com has quickly become a leading crowdfunding platform. The platform has helped over 800 companies raise more than $300 million from over 500,000 investors. StartEngine.com offers a wide range of investment opportunities, from early-stage startups to established companies looking to raise additional funding.
In order to get started with StartEngine, you must first choose whether or not your company qualifies for Regulation Crowdfunding or Regulation A+.
Regulation Crowdfunding allows companies with less than $1 million in annual revenue and 500 shareholders (or 250 unaccredited investors) to raise up to $1 million per year through the sale of securities. If your company does not meet these requirements, then it can still raise up to $50 million through Regulation A+ offerings which require SEC approval before they can be sold publicly.
How Does StartEngine Work?
StartEngine.com does two main things. It allows entrepreneurs to raise capital for their businesses and allows investors to invest in startups.
Entrepreneurs create a pitch for their company and upload it onto the site; investors browse through these pitches and decide which ones they want to invest in; once an investor makes an investment decision, StartEngine sends all relevant information about that particular opportunity directly to them (i.e., how much money is being raised). Then both parties enter into a binding contract whereupon funds are transferred from one party's bank account into another party's bank account (or some other form of payment).
"Investing has traditionally been a game for the wealthy. But with the advent of crowdfunding, anyone can invest in exciting startups and small businesses. StartEngine.com is a crowdfunding platform that's making investing accessible to everyone."
Regulation Crowdfunding is a new type of investment opportunity that allows entrepreneurs to raise up to $5 million in a 12-month period from both accredited and non-accredited investors.
Regulation Crowdfunding was created by Title III of the JOBS Act, which was signed into law by President Obama on April 5, 2012. The SEC has been working on finalizing rules for Regulation Crowdfunding since 2013; these regulations were finally approved by the SEC in November 2016 and went into effect March 29th 2017.
Regulation A+ is a type of crowdfunding that allows entrepreneurs to raise up to $75 million in a 12-month period from both accredited and non-accredited investors.
Regulation A+ was created by the JOBS Act, which was signed into law by President Obama in 2012. The goal of this legislation was to make it easier for smaller companies to raise capital through equity crowdfunding platforms like StartEngine.
Benefits of StartEngine
The benefits of StartEngine include:
- Providing a platform for entrepreneurs to raise capital. StartEngine offers investors the opportunity to invest in startups and small businesses, which can potentially generate high returns.
- Supporting innovative companies by helping them get off the ground. The company supports new ideas by providing funding and advice from experienced professionals who have been there before, so you don't have to go through it alone!
Risks of StartEngine
StartEngine is an online investment platform that allows you to invest in startups. The company has been around since 2016, and it's one of the biggest players in this field.
StartEngine offers investors three types of opportunities:
Equity Crowdfunding (ECF) - You can invest directly into companies that are raising capital through StartEngine's ECF platform. These investments can be made with either cash or stock from another company that you own, but they're subject to SEC regulations regarding how much money you can put into these deals and how much equity you'll get back when they go public or get acquired by another firm;
Regulation A+ - This type of offering allows companies looking for funding up to $50 million per year raise capital from both accredited and non-accredited investors alike;
Regulation D Rule 506(b) - This type of offering allows private companies seeking up to $1 million per year raise capital from only accredited investors (people who have at least $200K in income).
No upfront fees for entrepreneurs. StartEngine does not charge any fees to entrepreneurs who raise money on the platform, although investors pay a fee when they invest in a company.
Investors pay a fee when they invest. Investors will be charged a 5% commission on their investment amount and an additional 1% if it's an equity crowdfunding offering (as opposed to debt).
If you're looking for alternatives to StartEngine, there are a few options.
AngelList is an online investment platform that connects startups with investors. WeFunder is similar to AngelList but focuses exclusively on equity crowdfunding campaigns. EquityNet provides a platform for companies seeking funding from accredited investors through its broker-dealer services arm. Republic allows users to invest in private companies without having to be accredited investors or have an IRA account
StartEngine is a great platform for entrepreneurs to raise capital and for investors to invest in startups and small businesses. It's easy to use, offers attractive investment opportunities, and has a strong team behind it.
StartEngine has been around since 2017, so it's had time to build up its reputation as an online investment platform. The fact that it's still operating today means that there are plenty of people who trust this company as an avenue for their investments--and we think you should too!