When did the JOBS bill go into effect allowing Crowdfunding equity raises?
- The JOBS Act, originally passed in 2012, included crowdfunding as a core part of the legislation. The registration of online platforms (such as StartEngine) under the act began in 2015, which opened up crowdfunding to the public in 2016.
What does it mean when someone has bought shares through StartEngine, how are they held?
- When an investor initially invests through the crowdfund campaign, money is held in escrow until Preserve hits a previously established minimum investment amount. At that point, when StartEngine distributes the collected funds from escrow, the individual investments get “locked."
- A branch of StartEngine is the registered transfer agent, in charge of accounting for and reconciling the investors and shares purchased. Preserve receives information about each of the investors, but on Preserve’s cap table, StartEngine is the listed holder. While the underlying investor have legal custody of their shares, StartEngine Primary is nominated to hold these shares on behalf of investors.
What voting power do investors in Preserve through the crowdfunding campaign with StartEngine get?
- Shares purchased on StartEngine are non-voting shares.
How does someone get their investment through StartEngine out? Is it only in a liquidity event?
- At this time, a liquidity event for Preserve is the only situation that would lead someone to get their investment “out.”
Could Preserve shareholders who own shares outside of StartEngine sell their shares on the StartEngine Secondary platform?
- This is not currently a possibility, but Preserve will continue to monitor the development of StartEngine Secondary.
What would happen in the unlikely event that Start Engine goes bankrupt? What would happen to the shares for which StartEngine is a registered transfer agent.
- StartEngine would offboard the shareholder records to a new transfer agent.
What happens to shares for which StartEngine is a registered transfer agent, in a Preserve liquidity event?
- If Preserve were to be acquired, the acquiring Transfer Agent would handle payments to StartEngine investors. In the event that Preserve were to go public, the transfer agent that takes Preserve public would become the transfer agent for the shares held by StartEngine.
What happens to StartEngine’s own shares in a Preserve liquidity event? (StartEngine receives Preserve shares as “commission” for hosting the raise.)
- StartEngine recieves whatever funds are due, just as any other investors would.
Are StartEngine shares (those received by StartEngine as commission) voting shares?
- StartEngine shares have the same rights as the shares issued in the offering (non-voting.)
Does someone have to be a U.S. citizen in order to invest via StartEngine?
- No. You do not need to be a U.S. citizen to invest. Unfortunately, citizens of the U.K. and Canada cannot invest in StartEngine campaigns.
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