Interview with Howard Marks, CEO and co-founder of Premier Start-up Investment Platform: StartEngine

StartEngine is one of the leading alternative investment platforms in the United States, giving young startups of all sizes, backgrounds and industries access to a community willing to invest in them. To date, StartEngine has helped more than 500 companies raise more than 60 600 million from a community of more than 760,000 potential investors.

The goal of StartEngine is to democratize fundraising. After all, 58% of startup-level companies have less than 25,000 to spend, and only 0.5% of startups are able to secure venture capital investment. By giving individual investors access to startup investments, companies can access a whole new field of financing for their business. Until 2012, only recognized investors could invest in startups. With the JOBS Act opening the door for retail investors, StartEngine is pushing to revitalize the industry.

Another significant value of crowdfunding from an entrepreneurial perspective is that it gives companies more control over their fundraising conditions. Founders can decide in advance how much to raise and how many shares to issue and can maintain control of their company through options such as ordinary shares.

Venture capital firms tend to be more aggressive with their requests. Conditions can be steep and direct, investors gain control of a company in exchange for potential capital.

StartEngine: Invest in online startups

How do you come up with ideas for companies?

President Obama re-signed the Jobs Act in April 2012. Until then, only recognized investors and venture capitalists could invest in exciting startups. This was due to how the SEC implemented investment rules, allowing entrepreneurs to follow them or leaving investors free from litigation.

I have been investing in early stage companies for years. It has become clear that traditional startup investors, in this case angels and viceroys, have not invested too much money in companies founded by women and minorities.

Shocked by this observation, I decided that something had to be done. Then came the Jobs Act, which allowed companies to start adapting to the equity crowdfunding model, where the crowd invested directly in startups regardless of their faith. This was, in my opinion, the beginning of a financing revolution. I co-founded StartEngine with Ron Miller in Los Angeles in 2015 as a result of these big changes in space, and we’ve grown ever since.

Today, our model is important for entrepreneurs who have traditionally struggled to access capital. In the crowdfunding sector as a whole, 32.4% of the funds invested went to the companies of minority founders. Because crowdfunding gives startups access to everyday retail investors, who can decide to invest based on the founder’s ideas and passions and motives – rather than gender and race.

How did the company perform during the epidemic?

During the epidemic, the startup space has grown in activity as more people have downtime to start new ventures and start businesses. On our platform alone, we’ve helped raise more than $ 380 million for over 200 companies over the past two years. In addition, we’ve raised more than $ 29 million in a successful round of funding in 2021, which has led to a round of funding in our current Reggie.

Additionally, retail investors looking to diversify their portfolios in the face of inflation, international conflict and the uncertainties of Covid-19 have only a few more options to invest in – even collectibles – in terms of new companies.

What can you expect for the future of StartEngine?

Now that we’ve completed our own funding process, we want to expand our reach to put ourselves on the radar of more startups. We are also focusing on helping growing companies gain access to more investors.

Crowdfunded companies build a base of followers, potential customers and investors, which means startups can reach the initial audience for their products and ideas. For example, healthcare and biotechnology companies can share their work with the public and even get support before they go commercial.

We are committed to raising $ 10 billion for startups by 2029.

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