StartEngine, a leading investment crowdfunding platform in the United States, has made significant strides in democratizing investment opportunities through its innovative trading marketplace, StartEngine Secondary. This platform is one of the first in the U.S. to facilitate trading for Regulation A+ and Regulation Crowdfunding offerings, marking a notable advancement in the accessibility of investment in startups and growth companies to the general public.
Investors looking for instructions on how to get started selling their shares can follow this comprehensive guide on how to sell their shares in equity crowdfunding startups and sign up for StartEngine Secondary.
StartEngine Secondary operates as an Alternative Trading System (ATS), regulated by the SEC and managed by StartEngine Primary, LLC, a broker-dealer registered with both the SEC and FINRA. This trading system allows investors to buy and sell shares of companies that have raised capital through StartEngine, offering liquidity to investments traditionally considered illiquid. Since its launch, StartEngine itself became the first company to list its shares on StartEngine Secondary, witnessing over $1.4 million worth of shares traded among 1,200 investors, showcasing the platform’s potential to facilitate a vibrant market for secondary transactions.
The platform’s operation hours are tailored to ensure orderly trading, with specific times allocated for the execution of trades, and offers an order book feature for investors to view current buy/sell orders, enhancing transparency and aiding decision-making. It’s open specifically from 1-3pm EST. Importantly, StartEngine Secondary emphasizes investor education, noting that investment decisions should be based on thorough personal examination of the issuer and the offering’s terms, including the risks involved. It’s highlighted that investments made on the platform are speculative, involve a high degree of risk, and could result in the loss of the entire investment.
Moreover, the platform addresses various regulatory and operational aspects to ensure compliance and protect investor interests. For instance, certain restrictions apply to who can trade on StartEngine Secondary, including prohibitions on employees of StartEngine Crowdfunding, their households, and “insiders” as defined by the SEC. Additionally, the platform operates with considerations for state-specific regulations affecting the trading of securities, ensuring broad accessibility while maintaining compliance with regulatory requirements.
StartEngine’s commitment to innovation and regulatory compliance underscores the platform’s role in advancing equity crowdfunding and opening up new opportunities for investors and companies alike. By providing a secondary market for shares, StartEngine Secondary not only enhances liquidity for investors but also represents a significant step forward in the democratization of finance, aligning with the broader mission of StartEngine to empower entrepreneurs and investors by making capital more accessible.
StartEngine’s Volatile First Day of Trading
StartEngine listed on Secondary for the first time in many years on Tuesday, February 13th. In a volatile first day of trading, over 14 pages of sell orders were immediately placed for prices ranging between $40 and $3. Several trades have even been executed so far for prices between $3 and $5.
The steep sell-off highlights a number of competing factors. Notably, tens of thousands of investors have been waiting years for the chance at liquidity. Many have put in sell orders well above the previous raise price of $25, which are unlikely to be fulfilled. But many are simply in need of money or might no longer believe in StartEngine or equity crowdfunding and looking to get some of their money back.
Another factor is the long transfer time for investors to transfer in funds to their StartEngine accounts. Since there was no real need for investors to have funds in their StartEngine accounts, it’s unlikely many had any available to buy up shares for the dip. It takes 5-7 business days for funds to transfer in, so there’s likely to be a sharp decline in their stock price for the next several days.
Several other companies have recently listed on Secondary alongside StartEngine including:
- Uncle’s Ice Cream
- Reset IV Inc.
- Weatherflow-Tempest
- GACW
- Orion Hause Homes
- Blockchain Institute
- xCraft
- Solar Roadways
- Skunk Brothers Spirits
- Intrienergy Inc.
And many more continue to launch. The recently launched StartEngine Marketplace is a lead generation funnel to get companies listed on Secondary. This new model has seemingly been a large success as more companies continue to launch on the innovative liquidity platform every week.
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