Raising capital is an essential part of a founder’s journey, and until recently this process has been rife with barriers due to legal restrictions since the Securities Act of 1933. Enter today’s guest, Howard Marks, who has been working to democratize the capital raising space in his capacity as CEO and founder of StartEngine. Howard’s firm helps startups raise capital more easily by utilizing recent Reg D, Reg Crowdfunding, and Reg A Plus legislation, thereby bringing them closer to achieving their dreams. We kick off our chat with Howard hearing about his fundamental mission to help all entrepreneurs succeed and the amazing updates at StartEngine since the last time he came on the show, such as how they have raised over 150 million dollars so far! He talks about the extremely low price point StartEngine sets funding barrier at, before sharing the three things that any company seeking funding should be doing. We get into some of the legalities around capital raising in the history of the US, and Howard reiterates how recent lifts on restrictions is allowing StartEngine to remove the barriers to deal flow for angels. He shares some of the ways he vets new companies looking to raise capital and also talks about common mistakes entrepreneurs make during this process. Our conversation digs a little deeper into Howard’s philosophy of setting an ‘impossibly’ high goal for his company, and he explains how it all fits into the foundational ideas of the American Dream. Our chat winds down with some of Howards most favorite books, useful tools, and an argument for why Tesla is such an inspiring company. Make sure not to miss this great conversation about new developments in the capital raising space!
TIME-STAMPED SHOW NOTES:
[00:41] Before we jump into today’s interview, please rate, review, and subscribe to the Leveling Up Podcast![00:58] The mission at StartEngine and updates on its progress.[03:17] Allowing investors to invest in companies earlier; LiquidPiston’s success story. [05:58] The extremely low bar StartEngine sets funding rounds at.[06:20] The catch: not all companies can drive the excitement that LiquidPiston did.[06:37] Three things any company looking to raise money should do.[08:39] Removing barriers to deal flow (the name of the game in the VC world). [10:05] How regulations to investing implemented in the 1920s were lifted somewhat in 2012.[12:00] The five-week process that companies need to undergo to work with StartEngine. [13:56] How StartEngine vets the value of companies seeking funding.[15:33] Legal red tape to raising money publicly or privately since 1933.[17:09] Newer, more open regulations since 2016 that StartEngine works within.[20:14] Whether funding according to Regulation C could get you sued or not.[23:32] Mistakes many young entrepreneurs make raising capital around work and execution.[25:58] Capital raising, the American Dream, and why StartEngine’s mission is so big.[28:40] The value of having an unattainable vision for reaching further.[30:40] Why the leadership and software at StartEngine outdo their competitors.[31:26] Shattered dreams, raising wrong, and the story of Howard’s work with Sugarfina.[36:35] Where investors can go to buy a business or merge with a company.[40:20] Howard’s favorite book, business tool, and company.
Resources From The Interview:
Howard Marks on LinkedIn
Howard Marks’ Blog
Zero To One
Howard Marks of Oaktree
Must read book: Sapiens, The Fountainhead, Business of Platforms
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