On January 8 2016, StartEngine announced that they secured a $5.5 million investment from SE Agoura Investment LLC, an affiliate of Aubrey Chernick. The company plans to use this investment to expand the platform and expand their marketing and awareness campaigns.
StartEngine launched in 2011. Since then, they have invested in over 60 startups and are now one of the leading equity crowdfunding platforms. As part of their business model, StartEngine offer seed fundings, office space, mentors, connections and other resources to grow your business.
“This investment is further proof of the early success of the StartEngine platform and the potential of equity crowdfunding,” said Ron Miller, CEO of StartEngine.
“This fundraise will elevate the StartEngine platform, adding new investment opportunities and furthering our mission to help entrepreneurs achieve their dreams.”
StartEngine is currently allowing entrepreneurs to raise money under Regulation A+, which is open to both accredited and unaccredited investors (you can learn more about Regulation A+ here). When Title III of the Jobs Act goes into effect, StartEngine intends to further expand the platform to include more unaccredited investors.
In the meantime, StartEngine is working hard to show startups that equity crowdfunding is one of the best options available. Large campaigns, like a current one by Elio Motors that has raised over $21 million so far, are helping prove it. Elio Motors has received a lot of attention as well as investments during this project, which will help them bring the prototype for their new minimalist, three-wheeled, two-seated cars to life.
“Fan reaction to this vehicle has been extraordinary, as we have nearly 50,000 people who have put down their hard earned money for a place in line and said ‘I want one’,” said company founder and CEO Paul Elio.
“How many other vehicles have built that much enthusiasm before production? Few, if any. This vehicle has struck a chord with the American public, and this stock offering has helped us get to an important phase in our development.”
This project is the largest Regulation A+ campaign to date, and if the trend continues we should be seeing more of them in 2016.
One of the issues StartEngine will face as they continue to grow will be explaining the benefit and legitimacy of these investments to potential investors. As it stands, some investors are interested in the opportunity but don’t quite understand why the companies need the money and how equity crowdfunding helps to benefit everyone in the big picture.