How Does StartEngine Work? StartEngine Crowdfunding
StartEngine is a global platform where companies raise funds for their businesses. It was co-founded by Howard Marks, who also founded Activision, the video game giant.
StartEngine has raised over $500m from 500 companies since 2016, making it one of the largest business crowdfunding sites on the internet to date.
They focus on helping entrepreneurs who need start-up funding to get started and for those who need additional funding to fund future stages.
There are two parts to the funding, including:
- Regulation Crowdfunding — to raise up to $5m — little to no start-up cost
- - Regulation A+ — to raise up to $75m — $50,000-$75,000 start-up cost
What is Crowdfunding?
The concept of crowdfunding starts with company owners developing a business idea. to the stage where it demonstrates some growth as a start-up company.
Once it has reached that stage, company’s can approach StartEngine to get listed on the site. All the company has to do is start the application process.
The next step is when investors come along to invest into a project. Once they are happy with their choice in business, they can invest the minimum investment amount and get a stake in the business.
The process is a win-win for both parties. The company owners get funding to fund their business, and the investor gets a piece of equity that will be worth something in the future.
Why do businesses need crowdfunding?
There are several reasons why businesses need crowdfunding, such as:
It gives access to new capital — it helps people to access funding that might not be able to usually access traditional finance. It provides an alternative model to standard venture capital and angel investing and to extend the invitation to average investors who are out there.