This Startup Is Turning the Entire Venture Capital World On Its Head

Venture capitalists (VCs) have prided themselves for the past several decades on funding the democratization of dozens of industries. 

Robinhood Markets Inc. allows anyone to become a stock market investor, and Shopify Inc. allows anyone to have their own online store.

But it seems venture capital itself might be on the cusp of a major disruption. StartEngine is a leading equity crowdfunding platform that allows anyone to invest in startups — including StartEngine itself. This means anyone can invest in this high-growth startup alongside Kevin O’Leary and tens of thousands of retail investors. 

Startup investing can be a gold mine when done right because typically it just takes one successful investment to make a portfolio. Venture capital consistently beats the overall stock market with the average VC fund return sitting at a staggering 25% per year. 

But until just recently, it was illegal for everyday investors to invest in this asset class. StartEngine is changing that by allowing anyone to invest in startups. This means startups can turn customers into investors and investors into a band of thousands of brand ambassadors and supporters.

Potentially more important is that StartEngine is raising funds itself, and that means you can invest and share in the upside. The company isn’t publicly traded yet, but that means you can invest before it launches an initial public offering (IPO) and capture the growth you see on some of those big IPO days. 

StartEngine is particularly interesting because not only is it the leading equity crowdfunding platform, it also takes a percentage of nearly every company raised on the platform. This means StartEngine itself is essentially like a fund of startups but also a high-growth startup in a quickly growing emerging market. StartEngine recently leveraged its industry lead to acquire rival platform, SeedInvest. 

Another promising aspect of StartEngine’s business is the creation of StartEngine Secondary, one of the first and only actively trading startup secondary markets in the U.S. StartEngine aims to provide secondary liquidity to the millions of dollars raised on the platform. Instead of a company's only option for a return being an IPO or acquisition, Secondary allows investors to cash out while StartEngine takes a percentage of the volume.

The equity crowdfunding market has been heating up with nearly 100% growth the past two consecutive years. As the market leader, StartEngine is looking to capture that growth. This is already making an impact on the VC world, as it creates an alternative financing method for startups. This means equity crowdfunding and venture capital are actively competing for deal flow, and in some instances, equity crowdfunding is winning.

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Photo: Courtesy of StartEngine