StartEngine, a leading investment crowdfunding platform in the US, is reporting 37 exits to date. This includes the issuers that raised capital on SeedInvest, a platform StartEngine recently acquired.
In a widely distributed email, StartEngine CEO Howard Marks commented:
“In order to take equity crowdfunding to next level, I believe the key is access to liquidity.”
The same email claims that competitors Wefunder and Republic trail StartEngine in exit activity. StartEngine states that Wefunder has booked two exits while Republic has recorded just one. It was not immediately clear if the exits were referring to Reg CF issuers, Reg A+ issuers or Reg D – or a combination of the exemptions.
In the end, investors must generate returns for securities crowdfunding to be deemed successful. While many firms may fail or stall, just like venture capital – investors must generate positive returns on a portfolio basis to maintain demand.
While exits are typically measured by the number of firms that go public or get acquired, there is growing activity to provide secondary trading by platforms. StartEngine is currently working on developing an effective secondary marketplace for private securities issued on its platform.