Author Topic: StartEngine  (Read 361 times)

Montecarlo

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StartEngine
« on: September 10, 2020, 06:11:44 AM »
Anyone look into this?  Iím considering it for a small sliver of my portfolio.  I am fine with the risks of investing in a startup that goes bust.  What concerns me more, is what happens if the platform goes bust but the company I invested in is fine?  Itís my same concern with LendingClub.

I figure it would probably be okay, but if the platform is housing all the documentation that I am a part owner, and all that becomes sealed up in some archive with no employees to fetch it... just a worry I have

yachi

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Re: StartEngine
« Reply #1 on: September 11, 2020, 12:10:54 PM »
This is the first I've heard about it, other than hearing about the US being petitioned to loosen some of the restrictions on startup investing.  After the fund raising offering closes, the company you invested in writes your name down on their capitalization table, and startengine is out of it. 

Have a look at their investor FAQ's.  Under Can I sell my shares? they say this:

Once the live offering has closed, you may choose how to handle your shares. You will be introduced to the companyís selected transfer agent, which is the cap table management service, who will be responsible for the transfer of your shares after the close of the offering.

Important note: there is not currently an established secondary market for shares sold on StartEngine, though we are building a trading platform where investors can buy and sell securities that will launch, pending our registration as a broker-dealer and ATS (Alternative Trading System) with the SEC and FINRA.

https://www.startengine.com/investor-faq?utm_source=startengine&utm_medium=blog&utm_campaign=BlogFooter

The important note would give me pause.  You won't be able to move your investment from company 1 to company 2 without first contacting company 1 to obtain your pay out, and then investing in company 2 thru startengine.  This would be a pain to chase down for $100 here and $500 there.

yachi

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Re: StartEngine
« Reply #2 on: September 11, 2020, 12:32:28 PM »
Their trading platform might be launching in October.  This could be fun to follow as it will be a very low-volume trading platform.

Today if you invest in a company on StartEngine, typically you can't exit your investment until that company experiences a liquidity event, such as being acquired by another business or an IPO. Those events can take anywhere from 5-10 years to occur, if they occur at all.