StartEngine - Kaxlo
StartEngine
Equity Crowdfunding Portal Review
StartEngine aims to revolutionize the startup financing model by helping both accredited and non-accredited investors invest in private companies on a public platform. StartEngine Crowdfunding, Inc. operates under Title IV of the Jumpstart our Business Startups Act (“JOBS Act”), allowing private companies to advertise the sale of stock to both accredited and non-accredited investors.

Min Investment:

$300

Security Type(s):

Debt, Convertible Note, SAFE, Equity, Royalty

Website:

Startengine.com

Summary

StartEngine helps everyday people invest and buy shares in startups. StartEngine launched March 19, 2014 and is incorporated in Deleware. Company headquarters are in West Hollywood California. The company was originally incorporated as StartEngine Crowdsourcing, Inc., but changed to the current name on May 8, 2014. On June 10, 2019, our subsidiary, StartEngine Primary LLC was approved for membership as a broker-dealer with FINRA.

Incentives and Promotions

StartEngine has an “owner bonus” for anyone that is investing larger dollar amounts. You must invest atleast $1000 to be placed in their exclusive “owners bonus” category. Once you have made a $1000 investment, all additional share you purchase will receive an additionally 10% equity bonus of shares. The bonus is only valid 1 year from when you make your first $1000 investment. The program appears to be designed to be as a loyalty program. With goal to keep investors to stay with the StartEngine platform and reward loyal investors that are investing larger dollar amounts.

Additionally, Startengine also offers a cash bonus of $1000 for any startup that you refer to the StartEngine platform. Similar to many other referral programs both the referrer (you) and the startup both get $1000. However the $1000 that goes to the startup is for use on campaign marketing.

Earnings & Data

StartEngine’s fundraising initiatives are rather impressive. Not only in the dollar amounts they are raising, but the ability to bring investors back to the platform. According to StartEngine they have over $50,000 investors on the platform and 24% of investors have made multiple investments.

We will report back on additional earnings and exits as our team dives in further to the data. We have been able to discover a couple exits, including Osurv which sold to Tan Capital Partners, however the terms of the deal are not widely public and we will be digging in to see if any of the investors who were part of their $20,000 raise on StartEngine were able to receive an ROI from their investment.

Compensation

StartEngine startups typically raise investment funds through one of two fee structures for posting Regulation A and Regulation D offerings. — either a per investor payment or a flat monthly fee. When using the per investor structure, the fee per investor is $50 under Regulation A and $250 under Regulation D. When using the flat monthly fee, under both Regulation A and Regulation D, companies can pay a $20,000 to $30,000 posting fee. Additionally some startups have landed agreements for flat fees negotiated on the basis of the expected investor volume.

Since StartEngine has been approved as a broker-dealer (June 2019) in lieu of the other fee arrangement, Regulation A and Regulation D offerings can be subject to a commission ranging between 5% and 7% based on the risks and other factors associated with the offering.

In Regulation Crowdfunding offerings, StartEnging’s funding portal subsidiary is permitted to charge commissions to the companies that raise funds on our platform. The fee is typically 6% to 10%. When investors use credit cards for purchases in shares. StartEnginge will charge additional fees to cover credit card processing costs.

Additional offerings and pricing from StartEngine:

Consulting Packages (StartEngine Premium) -$5,000 to $25,000
Digital advertising services (StartEngine Promote) – fee varies
Transfer agent services (StartEngine Secure) – additional fee
Certain Amendments filed on behalf of companies –  $1,000 fee
Required bad actor checks – additional fee.

Details

Accredited Investor Requirements:

No

Sectors/Industries:

Media, Eccomerece, Retail, Technology, Analytics

Portal Location:

United States

Portal Type:

Equity Crowdfunding

SEC CIK#:

0001661779
StartEngine Social Media:

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