Among the early adopters to new rules in the US governing equity crowdfunding sales to retail investors, StartEngine Crowdfunding has announced their own funding round. Securing $5.5 million from SE Agoura Investment LLC, an investment affiliate of Aubrey Chernick, StartEngine will be using the funding to expand their marketing of the platform.
Following the implementation of Regulation A+ of the JOBS Act in April, which allowed private firms to raise up to $50 million from non-accredited investors, StartEngine made headlines by receiving over $25 million in funding interest in a few weeks for the crowdfunding campaign of Elio Motors. That crowdfunding campaign has gone on to raise over $45 million in interest before Elio Motors received approval to sell $25 million in shares.
Beyond Regulation A+, which opened up sales to non-accredited investors but is still limited to larger startups that can afford the expected $50,000 to $100,000 in legal and accounting costs to conduct a sale, the US crowdfunding sector is expected to gain a tremendous boost when Title III of the JOBS Act goes into effect later this year. Focused specifically on crowdfunding, Title III provides a framework for smaller startups to raise up to $1 million from non-accredited investors using a crowdfunding campaign.
Among crowdfunding professionals, once Title III goes into effect, there is a hope that it will open up private company investing to a much larger population of investors and become an alternative to traditional asset classes like stocks and bond.
Commenting on their funding and the potential of crowdfunding in the US, Ron Miller, CEO of StartEngine stated: “This investment is further proof of the early success of the StartEngine platform and the potential of equity crowdfunding. This fundraise will elevate the StartEngine platform, adding new investment opportunities and furthering our mission to help entrepreneurs achieve their dreams.”
(Correction: The article was updated as it previously stated Elio Motors had received $21 million share reservations on $70 million of interest. Which in fact is related to pre-orders for the vehicle and not their shares)