Company Summary: StartEngine Crowdfunding, Inc.

Overview

StartEngine Crowdfunding, Inc. is a U.S.-based financial technology and services company, focusing on online securities offerings and related services. Founded in March 2014 and headquartered in Burbank, California, the company specializes in democratizing startup and private company funding by enabling both accredited and non-accredited investors to invest through an online platform.

Core Business Activities

• Platform Operations: Operates as a technology platform connecting issuers (companies seeking funds) and investors.
• Regulatory Compliance: Hosts securities offerings under SEC-registered exemptions including Regulation A, Regulation Crowdfunding (Regulation CF), and Regulation D (Rule 506(c) and 504).
• Services Provided:
  • Regulation A Offerings: Hosts companies raising from $100,000 up to $75 million, providing services like due diligence, custodial accounts, and vendor coordination; earns commissions (e.g., $2.7M in 2024).
  • Regulation Crowdfunding (Reg CF): Handles offerings seeking up to $5 million, with additional services such as campaign page design, marketing, due diligence, and custodial accounts; has hosted 75 offerings raising approximately $282 million as of March 31, 2025.
  • Regulation D Offerings: Facilitates offerings for accredited investors with no cap on funds raised; primarily under Rule 506(c).
  • StartEngine Private: Offers accredited investors membership interests in funds (“SE Funds”) which own shares in late-stage private, venture-capital-backed companies; manages and advises these funds.
  • Transfer Agent Services: Through StartEngine Secure LLC, manages investor account tracking, securities purchase records, and custody compliance.
  • StartEngine Secondary: Provides a secondary trading platform (ATS) allowing liquidity for securities issued on the platform. Launched May 2020, quoted over 400 issuers, with 25 actively quoted.
  • StartEngine Private: Launched Q3 2023, enabling accredited investors to buy into funds owning securities of late-stage private companies; became the company’s largest revenue stream in 2024.
  • Venture Club: A membership program ($275/year) offering bonus shares on investments and priority access.
  • StartEngine Premium: Marketing support for campaigns, offered at an additional fee (e.g., campaign page design, marketing strategy).

Financial Highlights (as of March 31, 2025)

• Employees: 71 employees.
• Customers/User Base: Approximately 1,541,000 registered users, of which about 391,000 have made investments.
• Shares Outstanding:
  • Common Stock: 704,783,714 shares.
  • Series T Preferred: 9,642,080 shares.
  • Series Seed Preferred: 204,810,720 shares.
  • Series A Preferred: 185,440,880 shares.
• Revenue: $48.6 million in 2024, more than doubling from $23.4 million in 2023.
  • Major Revenue Sources in 2024:
    • StartEngine Private: $27.9 million (largest revenue contributor, from 41 offerings).
    • Regulation Crowdfunding platform fees: $8.7 million.
    • Regulation A commissions: $2.7 million.
    • Venture Club revenue: $5.4 million.
    • StartEngine Premium: $2.5 million.
    • StartEngine Secure: $1.4 million.
    • Other service revenue: ~$184,000.
• Net Income/Loss: Net loss of $16.5 million in 2024, slightly higher than $16.4 million loss in 2023.
• Market Capitalization: Approximate market value of non-affiliate held voting/non-voting common equity is ~$673.7 million (as of June 30, 2024, based on Regulation A offering data).

Key Assets & Operations

• Owns and manages multiple subsidiaries:
  • StartEngine Primary LLC: Registered broker-dealer, operating an ATS and providing brokerage services.
  • StartEngine Secure LLC: Transfer agent registration.
  • StartEngine Assets LLC: Managed and securitized assets such as real estate and collectibles (ceased collectibles offerings in 2023).
  • StartEngine Private Manager LLC & StartEngine Adviser LLC: Manage and advise private funds.

Regulatory and Legal

• Complies with SEC, FINRA, and state securities laws.
• Registered as a broker-dealer, funding portal, transfer agent, and exempt reporting adviser.
• Subject to ongoing legal proceedings, including a 2024 arbitration settlement of $2.1 million (covered mostly by insurance).
• Relies on third-party vendors for escrow and cloud services.

Strategic Focus

• Continual development of new products and expansion of services.
• Focused on increasing liquidity via StartEngine Secondary.
• Active in industry advocacy, legal/regulatory affairs, and industry best practices.
• Aims to facilitate $10 billion in funding by 2029.

Note: This summary is based solely on provided data, including specific financial figures, operational details, and company offerings without speculation.