What is StartEngine? Start Engine Fees - Reg CF, Reg A and Reg A+
Founded in 2014 by Howard Marks and Ron Miller, with Kevin O’Leary (Shark Tank TV host) as a strategic advisor, StartEngine allows people to become investors in early stage startups. The platform offers an easy approach to crowdfunding Reg A and Reg CF, making it one of the top picks for investors.
StartEngine offers a wide range of investment opportunities in both business and consumer-facing startups. High-potential industries like renewable energy, space exploration, and robotics are heavily represented here, but more ordinary niches like home automation and craft beverages are also available.
To help you make an informed investment, all company profiles on StartEngine include the relevant company’s valuation, number of investors, price per share, and more.
How it Works
There are two options for equity crowdfunding on StartEngine. One is Regulation Crowdfunding. This is where a company can raise up to one million annually and any investor is allowed to participate. A company can offer several types of equity. Examples include preferred and common shares, including debt instruments. The other option is Regulation A offering. With this, a company can raise up to $75 million per year. However, the regulations are more stringent. Note that a crowdfunding Reg A is generally known as “mini IPO” as there is a qualification process with SEC.
StartEngine has the distinction of pulling off crowdfunding Reg A and Reg CF. It was a fund raise for Elio Motors of worth $17 million. Features If you sign up, StartEngine will offer you an account manager that is specially dedicated to your account only. For investors, it offers several features such as allowing you to invest via your credit card and more. The platform also offers you a dashboard that is useful for viewing dynamic analysis of all conversion rates and investments. Furthermore, the dashboard also helps you get the investment history and other relevant information of your company.
Sign up on the platform is free for investors. You can register, choose a company, and invest in it without worrying about any charges. StartEngine gets its returns by charging brands and companies a specific percentage of the total funding that they receive. However, it is worth mentioning that companies can choose to minimize the costs by having their investors pay a set StartEngine fee percentage in the form of processing fee i.e. 3.5%. The minimum amount of investment on StartEngine is $100 and it is open for all kinds of investors, accredited and non-accredited. Clients and Statistics Many of the top clients of StartEngine include The Wall Street Journal, Forbes, Los Angeles Times, Fortune, INC, The New York Times, etc.
According to the company’s claim, the platform has been quite successful. It has amassed over 500,000 investors, funded over 500 offerings, and raised more than $350 million since its inception.
Pros and Cons
You can start investing with as little as $100
Over 500k opportunities
Up to date live data
Open to both accredited and non-accredited investors
Dedicated support team
Investor dashboard allows you to easily track your investments
Processing fees may be relatively higher as compared to other crowdfunding Reg A and Reg CF platforms, however StartEngine brings over 250,000 investors and a well known website to easily promote you business for Company visibility.
Not suitable for investors who are looking for immediate results or short-term gains. (Note: A Companies Perks help to build a raise faster as Investors like having a stake in the Company).
If you are thinking of investing in StartEngine, you will be glad to know that the platform has gained a significant momentum over the years and it continued to thrive despite the COVID-19 pandemic. Based on unaudited financials, the platform posted revenues of $5.4 million for the first half of year 2020, that is about 186% increase on an annual basis. During this period, there was a net loss of $1.9 million. Since inception, StartEngine has facilitated more than $350 million in funding's. In conclusion, StartEngine is no doubt one of the best platforms for equity crowdfunding. However, keep in mind that there are risks involved when it comes to investing in startups. Not all startups grow to become successful and if a company goes under, you could lose your investment. So, it is recommended that you look at investing in startups as a way to diversity your portfolio with alternate investments instead of your sole investment strategy.
Investing in startups used to only be an option for rich and wealthy, but in the past decade the regulators have eased up on small businesses, making it possible for everyday people to invest in startups via crowdfunding. These days, whether you have $100 or $100,000, there are a wide range of platforms that allow you to invest in a portfolio of startups and early-stage companies. StartEngine is one of the popular platforms in the crowdfunding space. Learn More about Start Engine Fees compared to other crowdfunding platforms Start Engine Fees compared to other Start Engine platforms
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