Crowdfunding platform StartEngine is aiming to raise $46 million to fund the growth of its collectibles exchange and help private startups find new fundraisers.
Since its launch in 2014, Burbank-based StartEngine has helped startups raise more than $500 million from approximately 760,000 investors through more than 500 offerings, according to the company. In addition to allowing investors to buy stakes in companies, it also operates a collectibles platform allowing them to invest in everything from artwork to vintage comic books.
StartEngine was founded by Howard Marks, who in 1991 helped resurrect a struggling video game developer called Activision alongside roommate Bobby Kotick. Marks left Activision in 1997, around the time the Santa Monica-based company embarked on a wave of acquisitions that quickly grew its business and eventually culminated in becoming Activision Blizzard in 2008. The controversial Kotick continues to lead Activision Blizzard as CEO to date and set up his expectation Microsoft’s $69 billion acquisition.
Howard Marks, Founder and CEO of StartEngine
Courtesy of StartEngine
“I’ve got a big hit under my belt,” Marks, 59, joked of Activision. He thinks he has a second home run on the bridge with StageEngine.
StartEngine is currently crowdfunding Legion M, a Century City-based production company backed by “Star Trek” actor William Shatner that is seeking to raise $3.85 million in funding, and Sugarfina, a candy store based to El Segundo who is looking to raise $25. million.
In addition to buying shares in private companies, investors on the platform can also buy and sell fractional shares of collectibles such as artwork, vintage wines and trading cards. sports. In a pending bid, the unidentified owner of one of the Andy Warhol’s Marilyn Monroe Lithographs raised $302,000 from nearly 300 investors, who each participated with a minimum investment of $500.
Although still a small fraction of the overall private capital market, the equity crowdfunding market has increased considerably in recent years. According to crowdfunding advisory firm Crowdfund Capital Advisors, capital commitments to crowdfunded issuers increased 110% last year to $502 million, from $239 million in 2020 and $135 million in 2019. StartEngine’s competitors in the space include WeFunder, SeedInvest, Republic, and MicroVentures.
StartEngine collectibles such as art, wine, and trading cards.Courtesy of StartEngine
The trend has its roots in the federal government Jumpstart Our Business Startup Actor JOBS Act, of 2012. The law opened the door for ordinary people without broker credentials to buy stakes in startups, making it easier for companies to use crowdfunding to get started, instead of have to draw larger checks out of the business. capitalists or borrow money from moneylenders.
Marks said the crowdfunding rules implemented through the JOBS Act were the catalyst for the creation of his company.
“I decided this was the right frame,” he told dot.LA. “When I started Activision, everyone said video games were dead. Atari went bankrupt, right? I didn’t believe what people were telling me.
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