Why is ASU Enterprise Partners supporting this program?
ASU Enterprise Partners is a private, nonprofit parent company whose mission is to provide an ecosystem of services to create solutions and generate resources to extend Arizona State University’s reach and advance its charter. ASU InvestU is an initiative designed to connect ASU’s innovative startups with capital and resources that help them translate research and development to commercial success with community impact. Early capital raising is one of the greatest challenges early-stage startups face and the reason why many of them fail. In line with ASU’s mission of inclusivity and access, we are working with a leader in the crowdfunding space to increase access to capital for ASU-affiliated startups and provide a platform for our community and alumni to invest in ASU research, technology and entrepreneurs with as little as $100.
What is Equity Crowdfunding?
Equity crowdfunding was created when President Barack Obama signed the Jumpstart Our Business What is Equity Crowdfunding? Startups Act (JOBS Act) in 2012. The JOBS Act allows companies to raise money through two different regulations:
- 1. Regulation Crowdfunding: Legalized in May 2016, allowing companies to raise up to $5M/year.
- 2. Regulation A+: Legalized in June 2015, allowing companies to raise up to $75M/year.
The main difference between traditional investors and equity crowdfunding is equity crowdfunding investors do not have to meet the income or net worth standards of an accredited investor. Equity crowdfunding enables startups and private businesses to raise capital from the “crowd,” including their customers and advocates, and allows people over the age of 18 to invest in companies for as little as $100.
What are the benefits to ASU founders?
Equity crowdfunding through the ASU / Start Engine program will allow ASU founders to access these unique benefits:
- • Reduced barriers and complexity for innovative companies to raise the capital they need to scale
- • Greater access to more potential investors by fundraising from the “crowd,” including Start Engine’s community of 800,000+ investors
- • Ability to invite friends, family, and customers to participate in the success of your business
- • Reduced costs and exclusive marketing benefits negotiated between ASU and Start Engine
- • Control over the terms of the offering, including the type of stock, valuation, and deal terms
What are the benefits to the ASU community of alumni and friends?
Traditional investment opportunities are often limited to just the wealthy. Through equity crowdfunding, we aim to connect every alumni, friend, and supporter of the university with investment opportunities to create transformative change. Benefits include:
- • Opportunity to not just support ASU technologies and founders but participate in the upside
- • Ability to invest in companies for as little as $100 with no accredited investor status required
- • No upfront fees to participate in Start Engine’s crowdfunding platform of ASU startups
How do I apply to fundraise?
An eligible company is any company developed by an ASU student, faculty member, employee, alumnus and/or donor of ASU that is in the U.S. For the 2023 pilot program, ASU InvestU and StartEngine have worked together to identify and screen startups with a high likelihood of campaign success. Interested companies should contact InvestU@asuep.org. In a future partnership at scale, any eligible company will be able to apply directly to StartEngine.
How do I invest?
ASU will promote each affiliated equity crowdfunding campaign through the ASU InvestU network and relevant university news channels. Come back to this page at any time to view active and upcoming campaigns! Investors must be 18 years of age or older. Start Engine is not currently accepting investments from U.K. or Canadian investors. All investment decisions are made by individuals, and all investments are made directly from individuals to companies through the Start Engine platform.
Who sets the terms of the offering?
The offering company determines the class of stock to be sold (e.g., common stock or preferred stock), sets the valuation and deal terms, and chooses whether or not to include board of directors’ seats. The Start Engine compliance team will review the proposed offering terms and the supporting documentation prior to launching the campaign. Participants acknowledge that the terms and conditions of performance by StartEngine are not subject to the control of ASU or its affiliates and that such terms and conditions may be subject to change.
How do ASU and Start Engine support the company’s campaign?
ASU has worked closely with StartEngine to negotiate exclusive benefits and dedicated support for ASU companies throughout the equity crowdfunding process. StartEngine will qualify, meet, onboard, and launch the selected companies’ crowdfunding campaigns. ASU Enterprise Partners will promote each campaign to the ASU community, giving students, faculty, staff, alumni, and donors an opportunity to invest early into each company’s campaign offering. StartEngine will promote the campaign to its network of more than 800,000 investors to help the campaign reach its fundraising goal. ASU companies will also receive up to $40,000 in the form of an interest-free loan to be used for marketing spend exclusively for its fundraising campaign on StartEngine. The loan schedule and payment terms are based on fundraising milestones.
Each ASU company will have access to a dedicated StartEngine Team that will provide:
- • An Onboarding Manager who will support you through filling out your offering documentation
- • A Senior Onboarding Manager who will oversee the process and help you finalize your raise
- • A Creative Lead who will help build your campaign page using your company’s creative assets
- • A Funding Strategist who assists in building a strategic marketing plan to engage the StartEngine Community and the general public through organic and paid media efforts
- • Access to a robust and detailed marketing resource center with best practices and playbooks
- • A Customer Success Representative who will be your point of contact for all investor services items and questions while your campaign is live
How long will the campaign be open?
The average time fundraising campaign is 60 to 90 days.
How much does it cost to raise money on Start Engine?
StartEngine charges a variety of success-based fees, which can be viewed in their Company FAQs. ASU has negotiated terms with Start Engine to reduce costs and increase access for ASU companies as part of this program, including waiving the upfront campaign fee and providing access to exclusive marketing benefits. ASU Enterprise Partners does not take any transaction fees or equity from affiliated campaigns.
What types of companies are successful in equity crowdfunding?
StartEngine has launched equity crowdfunding campaigns in more than 40 industries, and those companies have ranged from pre-prototype startups to companies with 8-figure annual revenue. We recommend that you review success stories and company trends on Start Engine’s website to see how your company compares to successful campaigns. Activating your own community for investment is critical, so companies with a loyal customer base or mission-driven community tend to do well. Average campaigns raise $1.1 million, with 1,000 investors investing $1,000 each. The minimum raise amount is $10,000, and the maximum is $5 million. The average campaign funding success rate is 85%.
