StartEngine, a Santa Monica-based pioneer in the brave new world of OPOs, or Online Public Offerings — also known as equity crowdfunding — is making things even more exciting for those interested in hot new startups.
Raising up to $1M from accredited and non-accredited investors in exchange for equity became legal this year after years of review by the SEC. This new fundraising technique opens new doors for both entrepreneurs seeking capital and investors seeking to get in on the ground floor of new deals.
Howard Marks, Co-founder and Executive Chairman of StartEngine, announced in recent days that his company is offering $20,000 and a free Elio Motors vehicle to the person who gets 5,000 investor referral signups.
Marks was inspired by the story of Jet.com, an online retailer, that made a similar offer to the person who signed up the most members to Jet.com’s online buying service. The person who came out on top of this competition was awarded 100,000 shares in Jet.com.
A very astute guy named Eric Martin figured out how to mathematically maximize his chances and he invested $18,000 in personal money promoting his scheme to sign up new users of Jet.com. He won the contest.
Jet.com recently sold out to WalMart, and Martin’s shares are now worth a reported $20 million.
“Starting today, the first person to refer the most investors who join StartEngine by December 31st, 2016 will earn $20,000 and a free Elio Motors vehicle,” said Marks.
This is subject to the vehicles being available for sale, he noted.
Elio Motors recently conducted a successful crowdfunding campaign on StartEngine. The Elio vehicle looks part car, part motorcycle – and lots of futuristic fun.
Elio Motors raised nearly $17 million on StartEngine and is now, with cash in hand, gearing up to go into production.
Via crowdfunding, now legal because of the of the JOBS Act, signed by President Obama in 2012 with bipartisan support, early-stage entrepreneurs can raise up to $50 million a year for their startups from accredited and non-accredited investors.
Non-accredited (non-rich) investors can participate within certain restrictions intended to protect them from over-extending themselves or becoming the victims of scams. Accredited investors are more free to take bigger risks.
Larger deals can take advantage of Regulation A+, which allows companies to raise as much as $50 million. This technique is akin to going public (an OPO, or Online Public Offering), without all the legal and accounting rigamarole.
Using this technique, Elio Motors raised its nearly $17M.
Crowdfunding is of increasingly intense interest here in Silicon Beach, a rising hotbed of startup activity.
Marks is the co-founder of Activision, a video gaming powerhouse. He also ran Acclaim Games. He is now chairman of StartEngine.
Marks is joined in running StartEngine by partner Ron Miller, often described as an “entrepreneur’s entrepreneur.” Miller has been highly successful in the world of private equity and is a charismatic speaker at venues like Digital Hollywood.
StartEngine, which is located in the Real Office Centers (ROC) on Arizona Ave. in Santa Monica, began as a startup accelerator – an organization that helps startups get on their feet – and recently shifted gears and decided to become a pioneer in up-and-coming crowd-funding space.
Know any prospective investors? Ready to put in a little work? Some real cash and a new car could be yours by year’s end.
For more information – or to join the contest to sign up the most investors –go to StartEngine.com.
