Who will StartEngine Acquire Next?

NEW STARTUPS

Startups that you can invest in with as little as $100 right now:

⚽️ HOLODIA - Patented VR fitness tech, backed by TechStars (Wefunder)

🏏 Breybourne - Professional Cricket team building a 25,000 person stadium in Chicago (Wefunder)

🍫 Toak Chocolate - Designing the future of chocolate (Wefunder)

STARTENGINE GOES ON THE OFFENSIVE

StartEngine made a splash in 2023 by acquiring rival fundraising platform SeedInvest for $24M in an all-stock deal.

We’ve seen in StartEngine’s recent quarterly filings that this deal has been a home run. Through this acquisition, StartEngine:

• Paid $0 in cash

• Eliminated a competitor

• Obtained huge tax benefits

• Used SeedInvest’s user base to help launch StartEngine Private

This last one has been a huge boon to StartEngine’s revenue growth and just 1 year later accounts for 57% of company revenue.

During webinars, StartEngine’s CEO Howard Marks has charted an aggressive course for the future. He’s directly mentioned that StartEngine hopes to make another acquisition in the next 12 months.

And judging by the overwhelming success of their first acquisition, I don’t blame them.

I spent this entire Sunday plotting out potential acquisition targets for StartEngine - here’s 5 that I think could be in the running.

THE SHORTLIST OF POTENTIAL ACQUISITIONS

1. MicroVentures

   • What is it: Equity Crowdfunding platform for accredited and non-accredited investors

   • Why it makes sense: MicroVentures claims to have an investor base that’s chocked full of accredited investors. This would be like pouring gasoline on the StartEngine Private blaze. I’ve said before that StartEngine’s investor base is their competitive moat - combining MicroVentures’ ~200,000 members could further strengthen it.

   • Why it doesn’t: There might be too much overlap between MicroVentures + StartEngine’s member base in which case STE would be paying for members they already have.

2. Beautiful.ai

   • What is it: AI-generated pitch decks

   • Why it makes sense: Startups need a pitch deck to woo investors. StartEngine could integrate this software into their offering, giving startups better tools to create beautiful pitch decks faster. This would please startups as pitch decks can take a lot of time, and money if they contract this out. It would also help StartEngine because a better pitch leads to higher investment, which means more money in their pocket too.

   • Why it doesn’t: StartEngine has leaned into video as the main pitch asset. Leaning into pitch decks would be a departure from something that looks to already be working.

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3. IndieGogo

   • What is it: Similar to KickStarter, IndieGogo is a crowdfunding platform. There is no equity being exchanged, typically members give money with the idea of getting the product comes to market.

   • Why it makes sense: StartEngine already has a partnership with IndieGogo - while the exact details are unclear it seems like IndieGogo makes an effort for the startups to use StartEngine for a future equity raise. Acquiring IndieGogo would make the bond even stronger and potentially set up StartEngine with a robust startup pipeline.

   • Why it doesn’t: Acquiring IndieGogo would present a conflict of interest with their existing business. STE would have to decide whether to funnel startups down either the StartEngine OR IndieGogo path. Additionally, this one might be out of StartEngine’s budget, as IndieGogo is valued over $100M+.

4. Going Public

   • What is it: Shark Tank meets Equity Crowdfunding. A handful of startups are featured throughout the season, and investors have the option to invest in those companies as they follow along.

   • Why it makes sense: Going Public would add an entertainment element to StartEngine’s business which in itself could become a revenue-generator. Furthermore, it seems complementary to their core business and would drive additional investment on the platform.

   • Why it doesn’t: It’s unproven if consumers want this content, and even less certain if it’s been successful in driving investment to the featured startups. Right now, Going public pays for distribution on MarketWatch - ideally this would be content that is so good that people pay them to distribute on their site. Going Public has only produced 2 seasons, so it’s early days as they work out the kinks.

5. EquityZen

   • What is it: Equity Crowdfunding platform for accredited investors only

   • Why it makes sense: This one is similar to MicroVentures, but only for accredited investors. This makes it even more of a fit to aid STE Private, and with more scale - EquityZen claims to have 680,000 members in their investor base.

   • Why it doesn’t: While this one makes more sense for StartEngine, it will likely come with a higher price. EquityZen has 3x the members as MicroVentures, and each is worth more since they’re accredited.

If there’s a potential acquisition target i missed, hit reply and let me know!