StartEngine | STO is in live offering mode and is actively accepting 506c investments from accredited investors only.
$10,005.00 minimum investment

StartEngine | STO

The tokenized future of finance is here.

506c
Los Angeles, CA
Financial Services
Accepting International Investment
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This offering for accredited investors only | To verify your accreditation click "Invest Now"

Unaccredited investors can now reserve shares in our upcoming Reg A campaign.


Own the Future of Finance

Invest in the StartEngine Security Token Offering

We are launching this new Security Token Offering on a limited offer only.  We plan to raise up to $10M at $7.50 share, which is a 25% discount from our upcoming Regulation A+, which is has been filed with the SEC and is in the process of review.  We are offering Preferred shares similar to our previous preferred investment rounds. The shares will be restricted, which means they will not be free-trading.  This offer is only for accredited investors in the United States and other countries (subject to local investment rules).  Read:

Note: The Preferred shares have a one year transfer lock-up.


Since its founding, StartEngine's mission has been to help entrepreneurs achieve their dreams by providing democratized access to capital. This mission was first enabled by the 2012 Jumpstart Our Business Startups (JOBS) Act, which facilitated investment in early-stage startup businesses for everyone, regardless of wealth, in the United States. 


Our company is growing. Since inception, nearly 150 successful financings have been completed for startups and other businesses via the StartEngine platform.


Watch: Allen Jebsen, Vice President of Sales and Business Development, pitches our STO at the StartEngine Summit.

Learn More About the StartEngine STO

To share our progress and growth, StartEngine's CEO Howard Marks and our management team are holding meetings for prospective investors.  To join, click here and choose a time that’s convenient for you.



Investor Snapshot

About StartEngine

Founded in 2014, StartEngine is an equity crowdfunding and security token offering platform that seeks to help entrepreneurs achieve their dreams by democratizing access to capital. In June 2018, StartEngine closed its first Reg A+ round, raising nearly $5 million from 3,425 investors.

StartEngine Highlights

  • $2.4 Million in revenue for Q1 and Q2 of 2018
  • Most Reg CF offerings launched of any crowdfunding platform
  • 22% of investors participate in more than one offering
  • Average investment amount of $1,300

Offering Type

PREFERRED Equity

Price Per Share

$7.50

Preferred Shares

Minimum Investment

$10,000

Valuation

$119M*

* Valuation reflects the 14,384,571 issued preferred and common and 1,445,000 granted options.

Product / Service

Equity crowdfunding and security token platform, with a planned expansion of its secondary market utilizing blockchain technology.

Company Size / Demographics

Employees: 30

Location: West Hollywood, CA

Founded Date: 2015

Average User Age: 30-40

Ownership Structure

Founders (common and preferred): 42%

Employee Option Pool: 9%

Preferred Seed Round: 43%

Reg A+ common shares: 6%



While working with entrepreneurs, small businesses and others to host their capital raising efforts over the course of 2017, we recognized the potential of another form of capital creation: initial coin offerings (ICOs). In 2017, hundreds of companies raised over $5.6B through ICOs.  


There was little doubt that many were making use of ICOs to incredible benefit. But, it was our belief that these raises should be and ultimately would need to be conducted in accordance with securities regulation, including Regulation CF, D and A.


Seeing the opportunity, we moved to establish thought leadership within this emerging space. In November 2017, we conducted our first StartEngine Summit, bringing together thought leaders in cryptocurrency, finance and crowdfunding to chart a path forward for the Security Token Offering (STO).


Now, only months later, what we envisioned is a reality. Terms like "tokenized security", "security tokens" and "STOs" are commonplace. Just ask the thousands who attended our second and third StartEngine Summits in person and online in April and October.

Our Platform Has Been Ahead of Everyone

1st

to Launch a Reg CF ICO

Indeco

1st 

to Launch a Reg CF

Gigmor

1st

to Launch a Reg A+

Elio Motors

Former SEC Chairman Christopher Cox and StartEngine CEO Howard Marks share a laugh at this October's StartEngine Summit.

StartEngine has embraced this new marketplace, hosting the first Regulation CF ICO and many more since. Blazing this trail has only given us more inspiration. It's now our goal to use blockchain for our new service and services planned for the future: StartEngine Secure, LDGR, and StartEngine Secondary.


Contingent on the SEC's and FINRA's approval of StartEngine as a broker-dealer and Alternative Trading System (ATS), we intend to launch StartEngine Secondary, which will operate a secondary marketplace for tokenized securities, in the months ahead. This secondary market will be supported by StartEngine Secure, a trusted source and registered transfer agent, and LDGR, a decentralized application for logging transactions in Regulations CF, D and A securities.


Our goal is to raise $10 million with our own Security Token Offering (STO) in order to help achieve our vision for these services. Ultimately, we believe this will enable us to realize our broader goal of creating the modern financial firm.


Join us as we work to bring liquidity to small investors and startups with the introduction of StartEngine Secondary*, LDGR*, and StartEngine Secure. Invest in this limited-time StartEngine STO offering for accredited investors.


*Implementation of these services is contingent upon development by our team and approval by relevant regulatory bodies.

StartEngine Looks to the Future

A Lot Has Happened Since Our Last Raise

The past six months have been some of the most exciting and fast-paced in all of StartEngine's history. Our revenues increased to $2,421,061 for the six months ended June 30, 2018 from $770,668 for the six months ended June 30, 2017, an increase of 214%. Read our first six-month disclosure.  We also laid the groundwork for the next big things: StartEngine Secondary and LDGR.


Having provided a platform for entrepreneurs to raise more than $60 million, we've grown our user base to over 150,000, of which just over 38,000 have invested in a StartEngine raise. Of those, an incredible 22% of our investors participated in more than one offering.

As impressive as those stats are, we think they're merely suggestive of what's to come... Our community's response to our previous raise has inspired us to raise the bar and to aim for even loftier goals.


We believe that StartEngine can create the reimagined financial firm. To do this, we're working to lay the groundwork for services that can democratize access to liquidity for entrepreneurs and investors alike. By doing so, we believe that StartEngine can facilitate the creation of entirely new economies, jobs and means of capital formation.



Building a Secondary Market

StartEngine's Roadmap Forward

The StartEngine platform, through which we offer equity crowdfunding and ICOs under Regulations CF, D and A, has grown significantly. On the average 20 campaigns were launched per month. To build upon this growth, we intend to launch StartEngine Primary, our planned broker-dealer, and StartEngine Secondary, our planned trading platform.


StartEngine Secondary is our planned secondary market, upon which tokenized securities may be traded. Undergirding StartEngine Secondary are StartEngine Secure and LDGR. StartEngine Secure is our registered transfer agent and will act as such for StartEngine Secondary. LDGR is a patent-pending decentralized application on Ethereum that will provide tokenized stock certificates.


Working in tandem, it is our intention that these supporting services will allow StartEngine Secondary to function with the speed and efficiency expected by today’s investors. The full implementation of StartEngine Secondary, though, is ultimately dependent upon the SEC’s and FINRA's approval of StartEngine as a registered broker-dealer and an ATS (Alternative Trading System).

StartEngine's Chairman of the Board, Ron Miller, addresses the crowd at the StartEngine Summit.

Breaking Down Our Planned Secondary Marketplace

StartEngine Secondary

When our wholly-owned subsidiary, StartEngine Primary LLC, is registered as a broker-dealer and it is permitted to operate an ATS, we anticipate launching StartEngine Secondary as a marketplace to trade tokenized securities efficiently between buyers and sellers. Buyers can use Bitcoin or other cryptocurrencies to instantly purchase shares instead of waiting days for transactions to be completed.  We are currently in the process of seeking our registration.

LDGR

LDGR is a patent-pending decentralized application on the Ethereum blockchain with the purpose of helping companies offer liquidity to their investors. LDGR uses the ERC-1450 proposed draft.  LDGR can be deployed to create a tokenized digital security for every company using StartEngine Secondary, thereby enabling investors to trade their holdings on an open, transparent marketplace.

Read the LDGR White Paper.

StartEngine Secure

When an investor sells shares on StartEngine Secondary, StartEngine Secure, a registered transfer agent, will help complete the transaction. It will notify LDGR to publish the transaction on the blockchain. We also plan for StartEngine Secure to be able to integrate with other ATS platforms to process transfers outside of the StartEngine ecosystem in the future.



The Path to Liquidity

Dear Investor,

I have been an entrepreneur for the last 35 years, with a journey that has allowed me to tackle one of the most important problems that exist in our economy: access to capital.  


The American Dream has allowed millions of entrepreneurs to grow our economy into the largest in the world. Whether it is Thomas Edison, Steve Jobs or Elon Musk, these industry builders needed capital, and capital they received. 


Personally, I witnessed the arbitrary bias of the financial system when I was investing in dozens of entrepreneurs. There were so many who were unable to raise any capital because they did not fit the mold.  


I built StartEngine because I wanted to tear down the barriers that exist between entrepreneurs and capital. The JOBS Act brought about a tectonic shift in the industry. Now, with the recent advances in cryptocurrencies and blockchain technology, I believe it is possible to build a modern financial firm, one that works to the benefit of everyone. And I believe that StartEngine is the company to build it.


StartEngine has, I think, an unfair advantage: the quality of our team. It is comprised of passionate, mission-driven and ambitious individuals who are as diverse in their backgrounds, ideas and abilities as the entrepreneurs we work with every day.

The relationships we forge with these entrepreneurs are the most important. The capital they raise on our platform is essential to their success and achieving their dreams, and their aspirations are crucial to the realization of our company's goals.


I believe that StartEngine can be a catalyst for not only preserving the American Dream, but also for expanding access to it. By charting a path to liquidity for small investors and entrepreneurs, I believe we can expand economic opportunity in ways once thought impossible.


Don't just believe in this important mission, become a stakeholder in it. Join us as we seek to disrupt the future of finance and invest in this limited-time offering.


Sincerely,

Howard Marks

CEO, StartEngine



Risk Factors

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. 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. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

 

The company is subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently more risky than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.  Specific risk related to the Company, its Business, its Financial Condition, the Tokens, and the planned Offering include:

 

  • We are an early stage company and have not yet generated any profits;
  • Our financials were prepared on a “going concern” basis;
  • Any valuation of the Company at this stage is difficult to assess;
  • We operate in a regulatory environment that is evolving and uncertain;
  • We operate in a highly regulated industry;
  • We are seeking registration as a broker-dealer, and if approved, of which there can be no assurance, our business model and pricing structure will be altered;
  • We may be liable for misstatements made by issuers;
  • Our compliance is focused on U.S. laws and we have not analyzed foreign laws regarding the participation of non-U.S. residents;
  • StartEngine’s service offerings are relatively new in an industry that is still quickly evolving;
  • We have an evolving business model;
  • We are reliant on one main type of service;
  • Our future plans include the use of blockchain technology, including the Ethereum protocol;
  • We depend on key personnel and face challenges recruiting needed personnel;
  • StartEngine and its providers are vulnerable to hackers and cyber attacks;
  • The SEC may suspend trading in a stock when the SEC is of the opinion that a suspension is required to protect investors and the public interest;
  • StartEngine currently relies on one escrow agent and technology service provider;
  • We are dependent on general economic conditions;
  • We face significant market competition;
  • We may not be able to protect all of our intellectual property;
  • Our revenues and profits are subject to fluctuations;
  • If the company cannot raise sufficient funds it will not succeed; and
  • There is no minimum amount set as a condition to closing this offering.
  • There is uncertainty as to the amount of time it will take for us to deliver securities to investors under this offering;
  • Investors in our Series Token Preferred Stock or Preferred Tokens will have to be subject to drag along rights;
  • Voting control is in the hands of a few large stockholders;
  • The exclusive forum provision in the subscription agreements may have the effect of limiting an investor’s ability to bring legal action against us and could limit an investor’s ability to obtain a favorable judicial forum for disputes;
  • Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreements, which could result in less favorable outcomes to the plaintiff(s) in any action under the agreements;
  • Future fundraising may affect the rights of investors;
  • There is no current market for our Preferred Stock or Tokens;
  • You will need to keep records of your investment for tax purposes;
  • The digital wallets you will use to hold Tokens may be subject to cybersecurity breaches;
  • Digital wallets are vulnerable to physical or electronic computer break-ins, viruses and similar disruptive issues and security breaches;
  • The smart contract will have limited functionality and you will only be able to transfer Tokens through the transfer agent;
  • We will be relying on a third party network to issue the smart contracts;
  • The smart contracts will be different than other smart contracts; the definitive ownership of the ownership will be recorded on the transfer agent’s stock ledger;
  • The smart contracts may be vulnerable and may not work as anticipated, and you may have to go through administrative hassles to have your Tokens re-issued or may not be able to hold your shares in the form of Tokens;
  • Law enforcement officials may face particular challenges when investigating blockchain activities and, as a result, investor remedies may be limited;
  • The further development and acceptance of digital assets and use of blockchain technology, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate;
  • The slowing or stopping of the development or acceptance of digital assets or use of blockchain technology may adversely affect our business and your investment; and
  • Our price of Preferred Stock or Tokens may be volatile.



THIS PAGE MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY.  THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT.  WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS.  INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE.  THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.


WITH RESPECT TO THE REG A OFFERING, NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT FILED BY THE COMPANY WITH THE SEC HAS BEEN QUALIFIED BY THE SEC. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.AN OFFERING STATEMENT REGARDING THIS OFFERING HAS BEEN FILED WITH THE SEC. YOU MAY OBTAIN A COPY OF THE PRELIMINARY OFFERING CIRCULAR THAT IS PART OF THAT OFFERING STATEMENT HERE.



Offering Summary

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