How Raising Works
Raise your next round from your customers, your fans, and the general public. Here’s how it works.
Choose Your Path
On StartEngine, you craft your investment pitch into a web page, raise capital from hundreds or even thousands of investors online, and fund the next phase of your growth with a bigger and stronger community behind you.
To get started, you have two paths to choose from:
Regulation Crowdfunding
Raise up to $5M each year, every year through our funding portal, StartEngine Capital LLC
Launch at potentially no or minimal upfront cost
Launch in 4-6 weeks
Regulation A+
Raise up to $75M each year, every year through our broker-dealer, StartEngine Primary LLC
Launching costs $50,000-$75,000
Launch in 6 months*
*The timing to launch a Regulation A+ offering can vary widely, but generally speaking, it will take 30 days to compile the necessary documents, another 30 days to complete and submit disclosure to the SEC, and 90-120 days to get qualified by the SEC. More on this below.
The StartEngine Process
Intimidated by the cost of launching a Regulation A+ offering? At StartEngine, we believe in Always Be Raising and leveraging multiple raises for your business. Many companies start with a Regulation Crowdfunding offering (or two) before graduating to a Regulation A+ raise.
Between these two regulations, you can raise all of the capital you need, from $1M-$50M, and 50% of companies who raise capital on StartEngine once come back to raise on our platform again.
Steps:
Regardless of which regulation you choose, you will take the following steps in order to raise capital on StartEngine:
Steps:
2
Tell your story in your own words. Build and design your campaign page to attract investors. Our creative team will help you! Check out Knightscope’s and Terracycle’s pages for inspiration.
3
4
Under both regulations, you will need to provide basic legal documents, such as Articles of Incorporation and Board Resolution, as well as information about the business and its key executives.
5
For a Regulation A+ offering, you will need a full financial audit, but for Regulation Crowdfunding, you have a few 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.
- Get a full financial audit in order to raise up to $5M.
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, and if you start with a financial review, you can always commission an audit during your offering to raise more than $1.07M.
Launch your Campaign
What is required to launch?
Under both regulations, you will need to disclose basic legal documents, such as Articles of Incorporation and Board Resolution, as well as information about the business and its key executives.
The business owner can personally sign off on the legal and financial paperwork if the total raise is under $107,000. To raise between $107K-$1.07M, you will need to work with an outside CPA to verify your financials for the past two years (or since the business started). To raise from $1.07M-$5M, you will need a full financial audit.
*The information will be public and can be found in the SEC’s EDGAR database. This means anyone can look at your financials and the structure of your business.
How long will it take to reach the maximum raise?
Once your raise goes live, it’s time to market your offering to your community! Tell your friends, family, customers, and users that you’re raising capital and encourage them to invest in your business. We market your raise to our audience too as your campaign reaches different funding milestones.
The duration of campaigns can vary significantly, but as a general rule of thumb:
Offerings are required to be live for at least 21 days. Generally speaking, companies raise for anywhere between 60-90 days, but they can continue raising for up to one year and beyond.
What happens after the raise is over?
After you successfully raise capital through equity crowdfunding, you have a few ongoing requirements to your new investors:
Businesses are required to maintain their public disclosures and file an annual report with the SEC until certain conditions are met.
You have to file two reports a year with the SEC: annual reports with audited financials, and semiannual reports with unaudited financials.
*These reports are also public and can be found in the SEC’s EDGAR database.
Interested in raising
capital on StartEngine?
Read this article on Regulation Crowdfunding and another on Regulation A to learn more about each regulation.