*The minimum investment amount for Preferred Shares is $200,000.

** Valuation reflects the 14,337,698 preferred and common shares (which includes all shares currently issued as well as estimates of shares that the company anticipates selling through a private placement and a Regulation CF offering) and 1,520,000 granted options.

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

Issuers under Regulation CF choose to include this term; this bonus is not available for Regulation A or Regulation D offerings. This bonus will be valid for one year from when StartEngine accepts and countersigns the subscription agreement, which could take some time after an investor completes the subscription agreement. StartEngine is under no obligation to accept any subscription agreement. So long as the investor holds the requisite number of shares (134 shares for new StartEngine investors in this offering, or 67 shares for previous investors who invested in this offering), this bonus will be applied when such investor submits an investment commitment for a Regulation CF offering. The company reserves the right to discontinue this incentive if required for regulatory purposes. Investors are only entitled to one owner's bonus (meaning the total bonus is 10% regardless if you have invested in our previous offerings).

Dear Investor,

How do you justify the increase in StartEngine's valuation within a single year?

In terms of valuation, we've built a strong team of just under 30 employees in nearly 5 years, launched more raises than any other funding portal, and doubled in revenue from 2017 to 2018. Our valuation also takes into account our future plans to launch an investor trading platform, called StartEngine Secondary.

We believe that creating a marketplace where investors can trade securities previously purchased in companies on StartEngine will increase investor activity on our platform: with Secondary, they will have the possibility of achieving a return on their investment faster than they would have otherwise. As a result, we believe investors will participate in more raises on StartEngine, which in time will help boost the strength and activity on the secondary trading market as well. At the center of all that activity, we see StartEngine.

StartEngine has proven itself to be an emerging FinTech company, set on disrupting the financial market by offering an alternative way of financing companies. Our valuation takes into account the FinTech industry as a whole. According to FinTech Global, investments in the global FinTech industry have increased year over year since 2014, culminating in $54B raised in 2018. FinTech companies in North America have accounted for nearly half of that deal activity. Both of these trends indicate investors' bullish opinions on FinTech as a whole. Furthermore, the growth of companies such as Stripe ($22.5B valuation), Square ($30B market cap), Robinhood ($5.6B valuation), and Carta ($1.8B valuation), all point to a bullish market for FinTech companies that are digitizing finance (though this is not to imply that we will replicate those results).

To ground these industry statistics in the context of StartEngine, we raised our last $5M Regulation A round in 2018 at a $65M valuation. At the time, we had publicized our $2M revenue in 2017, and we had helped companies raise around $50M on our platform in the three years since we had started. Now? We are approaching $100M raised for companies on our platform (we crossed $90M a few weeks ago). We have helped over 265 companies raise capital to date, and in 2018 StartEngine generated $5M in revenue, nearly doubling our revenue from the year before.

Previous funding certainly plays its part in our valuation as well. To date, we have raised capital in 3 separate rounds of funding, which is common practice for startups. As you can see in our Form 1-A, prior to this offering, StartEngine has 7,430,310 shares of Common Stock outstanding, as well as 6,873,309 shares of Preferred Stock outstanding. For context, in this current offering, StartEngine is offering a maximum of 1,200,000 shares of Common Stock and a maximum of 133,333 shares of Series T Preferred Stock.

We have a long way to go, but we see all of this as a very promising start both for equity crowdfunding and for where StartEngine is positioned within the space. We are now raising capital to continue StartEngine's growth, and these factors all played into setting our current valuation.

How do I make money on my investment?

Traditionally, you would have to wait until StartEngine went public or the company was acquired by another business to receive a return on your investment (a process that took anywhere between 5-10 years), but once we are approved to operate an ATS, you will be able to sell your shares on StartEngine's website to other investors by posting the price per share you are willing to sell at, as well as how many shares you're selling, and see if there are any takers on the market. However, having a platform to sell your securities does not guarantee that there will be any purchasers for those securities at your desired price (or at any price).

What will the money be used for?

Investments made through this offering will go towards funding marketing StartEngine's platform to increase our brand awareness, building out our platform to make it easier to use for both companies and investors, and hiring top talent to grow our team while providing excellent customer service.

What is your growth plan?

Our priority in 2019 is getting registered as a broker-dealer and ATS (Alternative Trading System). Once registered, we will launch StartEngine Secondary, our planned trading platform, where investors can buy and sell shares that were originally issued by companies raising capital on StartEngine. StartEngine Secondary will use StartEngine Secure, our registered transfer agent. It is our intention that StartEngine Secure 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.

Who are your competitors?

Our competitors include Wefunder, SeedInvest, and Republic, all three of which are other FINRA-regulated funding portals and/or broker-dealers. However, we believe we have the following strengths:

• We are first-movers to market and launched offerings in both Regulation A and Regulation Crowdfunding before our competitors.
• We are the only platform to put on our clients' shoes: we have also used public equity crowdfunding for ourselves.
• We allow rolling disbursements, meaning companies can receive funds raised while the campaign is still on-going.
• We offer internal marketing services, StartEngine Promote, that help our companies raise capital by creating their marketing campaigns.
• We have increased the percentage of investors who invest in more than one offering from 4% to 22% in 2 years.
• We offer StartEngine Secure, which provides cap table management and communication tools to help companies manage their investors after closing their offering.
• As mentioned in the previous question, we are also working to become registered to operate an ATS, which would give our investor community an opportunity for liquidity.

I invested in StartEngine in an earlier funding round. What does this offering mean for my investment?

Our current offering does not impact your previous investment. The shares you purchased are still yours. There are just now more shares out there, meaning you now own a smaller percentage of StartEngine as a whole than you did before (and this is true for all StartEngine shareholders, including the founders). This is a process called dilution, which is normal for a growing startup. If a company is doing well, its valuation increases in future funding rounds, so that the value of individual shares stays the same or even increases. If you invested in our last Regulation A offering, you invested at $5 per share. While your shares are diluted, you paid less for them than investors in the current round.

What are the risks?

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.

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.  For specific risks related to the Company, its Business, its Financial Condition, and the planned Offering, please read our Offering Circular.

AN OFFERING STATEMENT REGARDING THIS OFFERING HAS BEEN FILED WITH THE SEC. THE SEC HAS QUALIFIED THAT OFFERING STATEMENT, WHICH ONLY MEANS THAT THE COMPANY MAY MAKE SALES OF THE SECURITIES DESCRIBED BY THE OFFERING STATEMENT. IT DOES NOT MEAN THAT THE SEC HAS APPROVED, PASSED UPON THE MERITS OR PASSED UPON THE ACCURACY OR COMPLETENESS OF THE INFORMATION IN THE OFFERING STATEMENT.

THE OFFERING CIRCULAR THAT IS PART OF THAT OFFERING STATEMENT CAN BE FOUND HERE.

THE OFFERING MATERIALS 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.