United States securities and exchange commission logo
April 13, 2021
Howard Marks
Chief Executive Officer
StartEngine Crowdfunding, Inc.
3900 W Alameda Ave.
Suite 1200
Burbank, CA 91505
Re: StartEngine
Crowdfunding, Inc.
Offering Statement
on Form 1-A
Filed March 17,
2021
File No. 024-11487
Dear Mr. Marks:
We have reviewed your offering statement and have the following
comments. In some of
our comments, we may ask you to provide us with information so we may
better understand your
disclosure.
Please respond to this letter by amending your offering statement
and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response. After reviewing any amendment to your offering statement and
the information you
provide in response to these comments, we may have additional comments.
Offering Statement on Form 1-A
Risk Factors
Voting control is in the hands of a few large stockholders, page 13
1. Please quantify the
percentage of voting shares that are held by these large stockholders
and indicate whether
they are insiders.
Plan of Distribution and Selling Shareholders
Bonus Shares; Discounted Price for Certain Investors, page 18
2. You disclose that
"certain investors" in this offering are eligible to receive Bonus Shares
equal to 10% of the
shares they purchase if they are members of the StartEngine OWNers
bonus program or
indicated interest in this offering on your website. Please revise to
clarify what you mean
by the phrase "certain investors" in this context.
Howard Marks
FirstName
StartEngineLastNameHoward Marks
Crowdfunding, Inc.
Comapany
April NameStartEngine Crowdfunding, Inc.
13, 2021
April 213, 2021 Page 2
Page
FirstName LastName
3. Please expand to describe the rights, preferences, and privileges
applicable to the Bonus
Shares. Alternatively, please revise to clarify, if true, that they
are identical to those of the
Common Shares. Also please revise your disclosure on page 39 in the
section headed
"Securities Being Offered" as applicable.
The Company's Business, page 20
4. We note your disclosure in the risk factor section, as well as in this
section, that that you
are in the "early stages" of operations when you have been in
existence for seven years
and commenced revenue-producing operations six years ago. Please
explain why with
operations over this length of time you still consider yourself to be
an early stage company
with a limited history.
StartEngine Secondary, page 22
5. We note your discussion here, and elsewhere in your offering
statement,
about StartEngine Secondary. Please provide more detailed disclosure
regarding its
operations. This would include, but is not limited to, discussions of
the history of its
development, who approved its operations in April 2020, what it has
received approval to
do, whether any securities other than your common stock have been
approved for listing,
and how you intend to generate revenue from its operations and process
transactions on
it. Please revise as applicable.
Management s Discussion and Analysis of Financial Condition and Results of
Operations
Trend Information, page 34
6. You state on page 34 that in April 2020 you received approval to
operate an ATS, which
you launched on October 30, 2020. Please reconcile this statement with
your disclosure:
on page 22 under the subheading "StartEngine Secondary" stating
that StartEngine
Secondary was launched on May 18, 2020; and
on page 26 under the subheading "SEC Requirements" that you have
not yet launched
such operations.
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
prior to
qualification.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
Howard Marks
StartEngine Crowdfunding, Inc.
April 13, 2021
Page 3
You may contact Michelle Miller at 202-551-3368 or Sharon Blume at
202-551-3474 if
you have questions regarding comments on the financial statements and related
matters. Please
contact David Lin at 202-551-3552 or Eric Envall at 202-551-3234 with any other
questions.
FirstName LastNameHoward Marks Sincerely,
Comapany NameStartEngine Crowdfunding, Inc.
Division of
Corporation Finance
April 13, 2021 Page 3 Office of Finance
FirstName LastName