StartEngine is one of the biggest retail crowdfunding platforms in the U.S., with more than 1 million registered users. The startup was also named in the Inc. Magazine’s top 5,000 fastest-growing companies in terms of revenue growth last year. This is not surprising, considering StartEngine’s annual revenue grew sixfold over the past three years.
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Kevin O’Leary’s Journey Into Startup Investing
Kevin O’Leary is a popular Canadian businessman and angel investor known for his appearance on the television show “Shark Tank.” He joined the crowdfunding startup as a strategic adviser and investor in March 2020 and has been a paid spokesperson for the platform for a few years.
Equity crowdfunding gained traction during the pandemic era as startups faced an immense liquidity crunch. Capitalizing on this trend, the multi-millionaire businessman stated, “We’re going to look back on this period as the start of the rise of equity crowdfunding, and I think it’s an industry that StartEngine is going to win.”
O’Leary has seemingly invested a substantial sum over the years, as he is primarily compensated in the form of options. Meaning the popular Shark has invested his own money into the company to purchase those options. The stock price has risen substantially since investing and the current value of those shares are worth nearly $50 million. But the strike price for his options package is actually the same price that was open to the public for investment at the time O’Leary signed on as a spokesperson.
StartEngine’s Rise
Over the last two years, StartEngine has raised just over $440 million on their platform from hundreds of Regulation CF and Regulation A+ offerings. This makes it the largest crowdfunding platform in the U.S. in terms of funds raised in 2021 and 2022. In the first quarter of 2023, StartEngine raised $35 million, over 16% higher than its target of $30 million. In addition, the company’s quarterly revenue amounted to $5.2 million, 15.5% greater than the estimated $4.5 million.
StartEngine raised nearly $27 million in 2020 through their own equity crowdfunding offering. However, the company issued a 1-for-3 stock split on July 7, 2021, essentially tripling each stockholder’s holdings.
When O’Leary joined the StartEngine team in 2020, his stock price was $7.50, the same price as the public offering that was active during that time. That gives the Shark a post-split share price of $2.50. StartEngine’s current stock price is sitting at exactly ten times that, giving a $1000 invested at the time O’Leary joined StartEngine a value of $10,000 today.
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