FAQ for Companies

Looking into equity crowdfunding for your next round of fundraising? Get your questions answered here.

Popular FAQs

Getting Started:

What is StartEngine?

StartEngine Crowdfunding, Inc. is the largest equity crowdfunding platform in the US and the first mover in the industry. StartEngine has raised over $450M via Reg A+ and Reg. CF combined through its subsidiaries StartEngine Primary and StartEngine Capital, for over 500 company offerings on our platform to date.

What is equity crowdfunding?

With the passage of the JOBS Act in 2012, the Obama administration made it possible for every US citizen to invest in startups, regardless of wealth or status. On StartEngine, anyone can invest in private businesses and buy shares of stock, debt, revenue share, and more.

Entrepreneurs no longer needed traditional sources of capital, such as private equity or venture capital firms, to bring their ideas to life; they just needed other like-minded visionaries willing to take a chance on something novel.

How much can I raise?

StartEngine specializes in two regulations under the JOBS Act: Regulation Crowdfunding (Reg CF) and Regulation A+.

Under Reg CF, you can raise a maximum of $1.07M from both accredited and non accredited investors each year, every year.

If you raise $1.07M under Reg CF and are looking for more, you can use Reg A+ and raise up to $50M each year, every year.

We also allow companies to raise unlimited amounts of capital under Regulation D 506(c), raising capital exclusively from accredited investors.

How much does it cost?

The cost of launching a Regulation Crowdfunding campaign varies on a case-by-case basis, but generally speaking it costs between $4,000-$10,000 for the financial review and legal documentation required to launch a Reg CF campaign.

However, it is possible to launch at no cost upfront if you meet a few criteria: 1) the company is incorporated as a Corporation and 2) the maximum raise limit is set to $107,000 to start, which allows you to self-certify the company’s financials and save on the financial review cost.

Regulation A+ costs a good deal more, ranging anywhere between $50,000-$100,000. It takes longer to launch as well. Per a report from the SEC, it takes an average of 110 days to be qualified.

Given the cost and time of becoming qualified for a Regulation A+ offering, we recommend that companies begin with Regulation Crowdfunding if they are interested in raising capital through equity crowdfunding. If you want to learn more about Regulation A+, click here, as the rest of this FAQ is devoted to Reg CF.

In terms of fees, StartEngine only makes money when you raise money. We charge 7%* of total capital raised for Regulation Crowdfunding offerings, an additional 2% of what you raise in equity, as well as $10K in deferred revenue that we collect when the offering is complete.

*The % charged may fluctuate between 7-12% based on the method of investment and fees associated.

What’s the difference between accredited and non-accredited investors?

In essence, the difference can be distilled down to the wealthy vs. everyone else. The real definition is that accredited investors are individuals with a networth greater than $1M (excluding their primary residence) or an annual income exceeding $200K per year for two years ($300K if combined with a spouse). With equity crowdfunding, both accredited and non-accredited investors can invest in your business.

How long does it take to launch?

Generally, companies finish onboarding in 4-6 weeks. We’re with you every step of the way and are on your timeline. Onboarding can be done more quickly if you’re on top of things and responsive to our team.

What do I need to launch?

Story: Tell your story in your own words. Build and design your campaign page to attract investors. Our creative team can help you!

Set your own terms: What’s your valuation? What kind of security do you want to sell and how much of it? It’s all up to you.

Legal: We request corporate documents like Articles of Incorporation and Board Resolutions to approve your fundraise.

Financial: You have two options:

– Save on upfront cost and self-certify your financials to raise up to 107K.

– Use one of our low-cost, preferred CPA vendors and get a 2-year independent financial review done in order to raise up to $1.07M from the start.

Don’t worry — if you start with self-certified financials, you can always commission the financial review during your offering in order to raise more than 107K.

How long will my campaign be open?

On average campaigns last 60-90 days. Anything less than 60 days tends to not be enough time to garner widespread awareness. Anything over 90 days tends to be too long, and you lose a sense of urgency.

What if I raise less than my funding goal?

We require that companies set a minimum funding goal of $10,000 for their campaign. This way if a company raises less than their maximum funding goal, they can still collect the investments they raised as long as it is more than $10,000.

Can I collect on capital as it comes in?

In order to collect capital on StartEngine as it comes in, you have to raise at least 120% of your minimum funding goal. Once you have raised $12,000 (120% of the $10,000 minimum funding goal) and the SEC-mandated 3 week cooling-period has expired, you can disburse funds raised as your campaign continues accepting new investments.

Do I need to apply? What’s the vetting process on StartEngine?

Companies must meet a basic set of criteria (such as being a US-based operating company, the founder is at least 18 years old, etc), and there is a list of prohibited types of companies that we do not work with at StartEngine.

We also analyze every company that comes to StartEngine’s platform in order to determine whether they are the right fit for our platform and audience as well as for equity crowdfunding in general. You can read more about StartEngine’s prohibited types of companies and eligibility requirements here.

Important Message

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. INVESTMENTS ON STARTENGINE ARE SPECULATIVE, ILLIQUID, AND INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE POSSIBLE LOSS OF YOUR ENTIRE INVESTMENT.

www.StartEngine.com is a website owned and operated by StartEngine Crowdfunding, Inc. (“StartEngine”), which is neither a registered broker-dealer, investment advisor nor funding portal.

Unless indicated otherwise with respect to a particular issuer, all securities-related activity is conducted by regulated affiliates of StartEngine: StartEngine Capital LLC, a funding portal registered here with the US Securities and Exchange Commission (SEC) and here as a member of the Financial Industry Regulatory Authority (FINRA), or StartEngine Primary LLC (“SE Primary”), a broker-dealer registered with the SEC and FINRA / SPIC. You can review the background of our broker-dealer and our investment professionals on FINRA’s BrokerCheck here. StartEngine Secondary is an alternative trading system (ATS) regulated by the SEC and operated by SE Primary. SE Primary is a member of SIPC and explanatory brochures are available upon request by contacting SIPC at (202) 371-8300.

StartEngine facilitates three types of primary offerings:

1) Regulation A offerings (JOBS Act Title IV; known as Regulation A+), which are offered to non-accredited and accredited investors alike. These offerings are made through StartEngine Primary, LLC (unless otherwise indicated). 2) Regulation D offerings (Rule 506(c)), which are offered only to accredited investors. These offerings are made through StartEngine Primary, LLC. 3) Regulation Crowdfunding offerings (JOBS Act Title III), which are offered to non-accredited and accredited investors alike. These offerings are made through StartEngine Capital, LLC. Some of these offerings are open to the general public, however there are important differences and risks.

Any securities offered on this website have not been recommended or approved by any federal or state securities commission or regulatory authority. StartEngine and its affiliates do not provide any investment advice or recommendation and do not provide any legal or tax advice concerning any securities. All securities listed on this site are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. StartEngine does not verify the adequacy, accuracy, or completeness of any information. Neither StartEngine nor any of its officers, directors, agents, and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy, or completeness of any information on this site or the use of information on this site.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks, and you should complete your own independent due diligence regarding the investment. This includes obtaining additional information about the company, opinions, financial projections, and legal or other investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment. See additional general disclosures here.

By accessing this site and any pages on this site, you agree to be bound by our Terms of Use and Privacy Policy, as may be amended from time to time without notice or liability.

Canadian Investors

Investment opportunities posted and accessible through the site will not be offered to Canadian resident investors. Potential investors are strongly advised to consult their legal, tax and financial advisors before investing. The securities offered on this site are not offered in jurisdictions where public solicitation for offerings is not permitted; it is solely your responsibility to comply with the laws and regulations of your country of residence.

California Investors Only – Do Not Sell My Personal Information (800-317-2200). StartEngine does not sell personal information. For all customer inquiries, please write to contact@startengine.com.

StartEngine Marketplace

StartEngine Marketplace (“SE Marketplace”) is a website operated by StartEngine Primary, LLC (“SE Primary”), a broker-dealer that is registered with the SEC and a member of FINRA and the SIPC.

StartEngine Secondary (“SE Secondary”) is our investor trading platform. SE Secondary is an SEC-registered Alternative Trading System ("ATS") operated by SE Primary that matches orders for buyers and sellers of securities. It allows investors to trade shares purchased through Regulation A+, Regulation Crowdfunding, or Regulation D for companies who have engaged StartEngine Secure LLC as their transfer agent. The term “Rapid,” when used in relation to transactions on SE Marketplace, specifically refers to transactions that are facilitated on SE Secondary, This is because, unlike with trades on the StartEngine Bulletin Board (“SE BB”), trades on SE Secondary are executed the moment that they are matched.

StartEngine Bulletin Board ("SE BB") is a bulletin board platform on which users can indicate to each other their interest to buy or sell shares of private companies that previously executed Reg CF or Reg A offerings not necessarily through SE Primary. As a bulletin board platform, SE BB provides a venue for investors to access information about such private company offerings and connect with potential sellers. All investment opportunities on SE BB are based on indicated interest from sellers and will need to be confirmed. Even if parties express mutual interest to enter into a trade on SE BB, a trade will not immediately result because execution is subject to additional contingencies, including among others, effecting of the transfer of the shares from the potential seller to the potential buyer by the issuer and/or transfer agent. SE BB is distinct and separate from SE Secondary. SE Secondary facilitates the trading of securities by matching orders between buyers and sellers and facilitating executions of trades on the platform. By contrast, under SE BB, SE Primary assists with the facilitation of a potential resulting trade off platform including, by among other things, approaching the issuer and other necessary parties in relation to the potential transaction. The term “Extended”, when used in relation to transactions on SE Marketplace denotes that these transactions are conducted via SE BB, and that these transactions may involve longer processing times compared to SE Secondary for the above-stated reasons.

Even if a security is qualified to be displayed on SE Marketplace, there is no guarantee an active trading market for the securities will ever develop, or if developed, be maintained. You should assume that you may not be able to liquidate your investment for some time or be able to pledge these shares as collateral.

The availability of company information does not indicate that the company has endorsed, supports, or otherwise participates with StartEngine. It also does not constitute an endorsement, solicitation or recommendation by StartEngine. StartEngine does not (1) make any recommendations or otherwise advise on the merits or advisability of a particular investment or transaction, (2) assist in the determination of the fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.