What Is Equity Crowdfunding?
Equity crowdfunding lets startups and private businesses raise capital from the crowd. Everyone can be an investor, not just VCs and private equity firms.
How Does It Work?
On StartEngine, people can invest in startups that they believe in. Equity crowdfunding allows startups and private companies to raise capital from the crowd through the sale of securities like equity, debt, revenue share and more.
Anyone, regardless of wealth, can invest in private businesses, not just the ones trading on stock exchanges, and they can do so online.
STEP 1
Discover Investments
Explore offerings and learn about the companies raising capital on StartEngine.
STEP 2
Buy Equity in Companies
Invest in private businesses and early-growth startups and purchase equity, debt, convertible note, revenue share, and more.
STEP 3
Follow Your Investments
Track the performance of your investments over time as the companies you invested in grow.
How Much Can
a Company Raise?
Equity crowdfunding was created when President Barack Obama signed the Jumpstart Our Business Startups Act (JOBS Act) in 2012, and the Act allows companies to raise money through a few different regulations:
Regulation
Crowdfunding
LEGALIZED IN MAY 2016
Allows companies to raise up to $1.07M each year, every year.
Regulation
A
LEGALIZED IN JUNE 2015
Allows companies to raise up to $50M each year, every year.
Read more about the differences between Regulation Crowdfunding and Regulation A+ here. To learn more about the growth of Regulation Crowdfunding, read national statistics in our monthly StartEngine Index. Companies can also raise capital on StartEngine through Regulation D 506(c), through which companies can raise an unlimited amount of money, but only from accredited investors.
Who Can Invest?
Anyone over 18 years old
can invest in companies on StartEngine.
can invest in companies on StartEngine.
Before Equity Crowdfunding
Traditionally, angel investors, venture capitalists, and accredited investors could invest in private companies and often were the only ones with access to those opportunities.
Accredited investors are individuals with a networth of greater than $1M (excluding their primary residence) or an annual income exceeding $200K per year for two years ($300K if combined with a spouse). In other words, these opportunities were often limited to the wealthy.
Today's Investors
Now, nearly anyone can invest in startups through equity crowdfunding. Investors have to be at least 18 years old, and StartEngine does not accept investment from Canadian and UK investors due to the securities laws in those countries. Otherwise, anyone can invest in companies raising capital on StartEngine.
Why Is Equity
Crowdfunding Special?
Create Opportunity
There are nearly 6 million businesses in the US, and the majority have a difficult time accessing capital, whether through venture capital or public markets. With equity crowdfunding, there is a path to create more opportunity for both businesses and investors.
Connect Visionaries
Entrepreneurs no longer needed venture capitalists to bring their ideas to life; they just needed other like-minded visionaries willing to take a chance on something novel.
Strengthen Community
Equity crowdfunding provides a unique opportunity for businesses to turn their customers into owners and create a more loyal user base, one that is full of brand ambassadors, ready to promote the business.
