Howard Marks demystifies equity crowdfunding
The Angel Next Door is back with all new episodes!! We will start off with demystifying equity crowdfunding. Marcia Dawood sits down with Howard Marks, CEO and cofounder of the crowdfunding platform StartEngine. StartEngine is an equity crowdfunding platform that recently acquired SeedInvest, bringing the total amount raised between the platforms to over $1 billion. Howard discusses how he started as an entrepreneur with his roommate at the University of Michigan, and purchased a controlling stake in the video game company Activision and turned it into the industry leading company it is today, leading to a purchase offer from Microsoft of $68 billion.
Howard tells the listeners how StartEngine was initially launched in 2010 as an accelerator for entrepreneurs in LA, but he quickly realized capitalizing these very early companies was the problem he really needed to solve. He explains how the JOBS Act of 2012 paved the way for a revolution in the way start ups could raise money, and how it changed the way StartEngine was going to help entrepreneurs.
Howard also shares with Marcia the background of how the rules and regulations for investing had limited who could invest in private startups to a very small group of people. The new regulations motivated him to launch StartEngine as a crowdfunding platform in 2015, which now operates as a funding portal, broker-dealer, and transfer agent, while providing liquidity options for investors, providing endless opportunities for regular investors outside of just the 4700 companies traded on the NYSE.
Finally, Howard explains what it takes to be successful when raising capital through crowdfunding. He and Marcia discuss the future of StartEngine and crowdfunding and new alternative investment opportunities in things like art, comic books, wine, and real estate (allowing new ways to diversify an investment portfolios) and touch on the debate on whether consumers should have the ability to risk their money on these types of investments.
Tune into this episode to get some great background on equity crowdfunding and learn how startups can be successful in gaining capital through these platforms!