AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Entrepreneurs have the opportunity to raise capital through equity crowdfunding platforms like StartEngine, democratizing access to funding. This innovative method allows companies to directly solicit investments from the general public, not limited to accredited investors. By focusing on regulation crowdfunding and regulation A+, StartEngine enables companies to raise significant amounts, up to $5 million and $75 million respectively, fostering growth and financial inclusivity.
Individual investors can participate in equity crowdfunding by reviewing company information on platforms like StartEngine. They can assess offerings, read comments, and engage with the investment community to make informed decisions. With due diligence facilitated by the platform and the crowd's feedback, investors play an active role in evaluating opportunities before making investment decisions.
Investments in companies through equity crowdfunding typically see liquidity events, like going public or being acquired, after five to seven years. However, the process can extend further, with some investments taking up to 20 years to realize returns. The long-term nature of these investments highlights the patience required for investors seeking liquidity and returns on their investments.
Private equity exits often present challenges in terms of liquidity and timing for investors. With an average exit timeline of seven years, investors may face uncertainties regarding when they can realize returns on their investments. The balance between waiting for an exit opportunity and seeking liquidity poses both challenges and opportunities for investors engaging in equity crowdfunding.
Equity crowdfunding reshapes the landscape of financing by providing a platform for companies to raise capital and for individual investors to participate in private investments. With evolving regulations and increased flexibility in fundraising limits, the sector anticipates significant growth and enhanced opportunities for entrepreneurs and investors alike. The emergence of equity crowdfunding as a viable financing option underscores a paradigm shift in the financial industry towards inclusivity and transparency.
Companies are staying private longer, with many delaying their initial public offerings (IPOs) like Airbnb and Facebook did. The shift towards longer private phases impacts equity crowdfunding. In the past, companies like Intel could raise $10 million during an IPO, while today, companies need to raise $2 billion to go public. This high cost and difficulty of going public have led many companies to opt for reverse mergers or special purpose acquisition companies (SPACs) for fundraising.
StartEngine introduced a secondary market to address the lack of liquidity in equity crowdfunding. This secondary market allows investors to trade shares after a year, providing a solution to the challenge of long waiting periods for liquidity. By implementing a marketplace for trading, StartEngine aims to revolutionize access to liquidity for investors and entrepreneurs, offering a new opportunity to the financial market.
Kevin O'Leary joined StartEngine as a strategic advisor to communicate the concept of equity crowdfunding to the public effectively. O'Leary's straightforward approach and expertise from 'Shark Tank' play a crucial role in simplifying complex financial concepts. With his involvement, equity crowdfunding gains credibility and clarity, signaling a new era in democratizing access to capital for entrepreneurs and investors alike.
Robert Leonard talks with Howard Marks to discuss the future of financing small businesses. Marks is the co-founder and CEO of StartEngine, a leading equity crowdfunding platform that allows people to invest in startups and raise capital through crowds. He started out as the founder and CEO of Acclaim Games, a publisher of online games now part of The Walt Disney Company.
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
03:58 - Business challenges and lessons from Activision, Acclaim Games, and StartEngine.
03:58 - How to raise capital through a platform like StartEngine.
22:37 - What crowdfunding is and why businesses need it.
22:37 - What are the different types of crowdfunding?
39:20 - What investors should do before diving into crowdfunding.
53:24 - How investors in private companies can get their capital back through crowdfunding.
57:01 - Why access to liquidity is important for private equity investors.
57:46 - What is the secondary market of StartEngine?
01:32:45 - The insights he learned from Kevin O’Leary of Shark Tank.
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
NEW TO THE SHOW?
SPONSORS
Support our free podcast by supporting our sponsors:
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Learn more about your ad choices. Visit megaphone.fm/adchoices
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Listen to all your favourite podcasts with AI-powered features
Listen to the best highlights from the podcasts you love and dive into the full episode
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
Listen to all your favourite podcasts with AI-powered features
Listen to the best highlights from the podcasts you love and dive into the full episode