Gift Horses and Rising Tides: Why StartEngine’s Funding Round Is Good for Founders
Mr. Wonderful here –
There’s an old expression my mother used to say: don’t look a gift horse in the mouth. What it means is that when someone’s doing you a favor – don’t whine about it.
So you can imagine my surprise when I spoke with Howard and the team, and learned that some of the companies raising capital on the platform had the gall to complain about StartEngine’s live funding round. As far as I’m concerned, if you need proof that this equity crowdfunding stuff actually works, look no further than StartEngine’s latest raise, which currently stands over $10 million. That should come as very welcome news to founders.
By the Numbers
Look, I get feeling skeptical. You’re probably asking yourself: if StartEngine is raising capital on its own platform, doesn’t that siphon dollars away from my funding round?
That’s why I asked the team to pull a couple stats I think you’ll find very interesting. Let’s just compare users on the platform who’ve invested in StartEngine itself (aka Owners) versus those who haven’t (Non-Owners).
Investment Activity of Owners vs Non-Owners
Stat
Owners
Non-Owners
Avg. No. of Investments
6.7
2.3
Avg. Dollars Invested*
$7,347
$1,961
Owners Bonus Members (%)
56%
11.9%
You know me – I love the numbers. And right off the bat, what’s clear is that Owners have a much higher lifetime value than other investors. On average, StartEngine shareholders make close to three times as many investments as the rest; they also contribute roughly three times the amount of dollars to raises. That’s not just good news for StartEngine, that’s good news for every eligible company raising capital on the platform.
Let’s talk about that last stat too: Owners Bonus Membership. Investors in StartEngine opt into the program at nearly five times the rate of everyone else. As a rule, that means they’re much more incentivized to continue investing – particularly if your raise offers Owners Bonus.
Need a refresh? Owners Bonus Members automatically receive 10% bonus shares when they invest in participating raises. Learn more.
Rising Tides Lift All Boats
If you’ve ever spoken to my friend Howard Marks, you’ve likely heard him joke that at StartEngine they, “eat their own dog food.” Essentially what he’s saying is that they’re working through this equity crowdfunding thing alongside you. That means they’re constantly testing and figuring out best practices to acquire funds through the crowd. I’ll give you a recent example – not too long ago Howard shared with me that the team had managed to boost conversion rates (i.e. how many people invest out of all the visitors to a page) on their website by more than 50%. That’s not something I’d sneeze at – what it is is real value for founders.
When the team at StartEngine talks about eating its own dogfood, that also means they’re spending ad dollars to bring new investors to the platform. Sure, those fresh-faced investors may look at StartEngine’s funding round, but a lot of them will go on to explore other opportunities. And if they do become StartEngine shareholders, well as we’ve seen, all the better for you.
Another favorite expression of my mother’s (I’m sure you know this one): a rising tide raises all boats. Now you can call it a gift horse or a rising tide – but at the end of the day, if you’re a founder, what’s good for StartEngine is good for you.
Kevin O’Leary is a paid spokesperson for StartEngine. View the details here.
*Average dollars invested was calculated by StartEngine in January 2023 by dividing the lifetime value of Owners and Non-Owners by StartEngine’s commission.
