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StartEngine Creeps Closer to IPO with Blowout Q1

StartEngine might not be public (yet), but they just reported earnings that gives them a clear path to a future IPO.

In Q1 of 2025, StartEngine posted $30.4 million in revenue—tripling their haul from the same period last year. And they did it while cutting costs, growing cash, and reinforcing a thesis that many retail investors have suspected for a while:

This company is getting serious about going public.

Here are 5 takeaways from StartEngine’s blowout Q1—and why they matter for anyone betting on the StartEngine IPO.

1. StartEngine Private Is the Business Now

Not long ago, Regulation Crowdfunding (Reg CF) and Regulation A were the core revenue engines at StartEngine. These are funding rounds where companies are raising funds directly from investors.

StartEngine Private is the company’s premium investment arm, offering access to exclusive late-stage startups like SpaceX to accredited investors.

While Private’s revenue had surpassed Reg CF / Reg A in the past, I still considered those two to be the core business as their higher profit margins made them more impactful to the business.

That’s no longer the case - StartEngine Private revenues are so high that it overcomes its lower margins. It is the core business now:

In Q1, StartEngine Private brought in $24.6 million, up from just $4.7 million in Q1 of 2024. That single line item accounted for 81% of total revenue this quarter.

By comparison:

• Reg CF brought in $1.8M, down from $2.6M (though more on that below)

• Reg A commissions were up big, hitting $1.4M, but still pale in comparison

StartEngine Private—which includes 20% carried interest in growth-stage private deals—is now the centerpiece. With companies like SpaceX, OpenAI, Perplexity, and Chime in the portfolio (and Chime having just filed for IPO), this vertical gives StartEngine exposure to exits that could be worth 8–9 figures in upside.

It’s no longer a nice-to-have. It’s the business.

2. Explosive Growth While Cutting Costs

In Q4 2024, StartEngine laid off 25% of its workforce. Layoffs are often framed as a survival tactic. But Q1 shows it might have actually been a performance move.

Here’s what happened:

• Marketing spend dropped to $3.3M (from $3.9M) → 14% decrease

• R&D came in at $1.4M (from $2M) → 30% decrease

• Overall expenses fell from $9M to $8.4M → 6.7% decrease

StartEngine just grew revenue by 3x while trimming its burn. That’s rare air for a company in growth mode—especially in equity crowdfunding, where operating margins can be thin and marketing is crucial to acquiring investors.

3. A Stockpile of Startup Equity

StartEngine’s business model quietly gives it something very few platforms in this space have: a balance sheet full of startup equity.

• Through StartEngine’s Reg CF / Reg A deals, they often take ~2% of funds raised as equity.

• With StartEngine Private, they earn 20% carry on high-growth deals.

That means StartEngine holds stakes—directly or indirectly—in some of the most coveted private startups in the world. SpaceX, OpenAI, Chime, Perplexity AI. That isn’t reflected as revenue, so all of that is just bonus on top of their blowout quarter.

This past quarter StartEngine earned $24.6 million in revenue from Private.

Thanks to its 20% carried interest structure, StartEngine doesn’t just generate revenue upfront—it holds a claim to future upside. If the $24.6 million invested this quarter grows 3x over the coming years, that’s a $49.2 million profit across all positions.

StartEngine’s 20% cut of that would be roughly $9.8 million. And that’s from just one quarter.

Stack that across multiple quarters and dozens of high-growth companies—many of which are already showing IPO potential—and the long-term earnings potential becomes massive.

Beyond its normal platform fees, StartEngine is quietly becoming a long-term carry machine.

And unlike a VC firm, StartEngine has operating income to fuel more acquisitions and expand its equity portfolio. If and when those companies exit (ahem, Chime IPO), StartEngine stands to collect.

4. Cash Is Up, and That’s a Big Deal

Last year in Q1, StartEngine burned through $2 million in cash.

This year? Their cash increased by $8 million. That extra cash comes with perks, it gives StartEngine:

• Flexibility to acquire more equity

• Runway to sustain lean operations

• Strength when considering a potential StartEngine IPO filing

A strong balance sheet matters more than ever in this interest-rate environment. It also telegraphs to investors (and potential acquirers or bankers) that the business has moved beyond scrappy startup mode.

I should caveat that there was a one-time boost in the quarter due to StartEngine selling its interest stake in a real estate complex, which padded the numbers by $1.4M.

Even accounting for this though, cash is still up big time and the company is in a great position.

5. Reg CF Revenue Looks Down—But It’s Not

One number in the report genuinely concerned me: Reg CF platform fees dropped by $747K year-over-year.

But as I dug into the footnotes, I found that the story flips.

Translation: Raise amounts were up, but the revenue hasn't hit the books yet.

Here’s the actual raise data:

• Q1 2025: $21.2M raised in escrow

• Q1 2024: $9.6M raised in escrow

More than 2x year-over-year. The revenue will catch up in subsequent quarters.

Something interesting that’s happening in the background is that Private is actually bringing in wealthy investors to the platform, and they actually invest in some of the Reg CF raises.

I talked to a big-time founder last week that actually cited this as one of the reasons they opted to list their raise on StartEngine.

In a webinar hosted by StartEngine, Howard Marks (cofounder & CEO) roughly estimated that StartEngine now has 100,000-200,000 accredited investors in their user base.

The deep pockets of this investor class is really encouraging for both Private and Reg CF raises on the platform.

So… Is the StartEngine IPO Coming?

No formal filing has been announced, and while Howard noted it is in their future plans he stopped short of confirming a timeframe for an IPO. But the signals are piling up:

• Operational efficiency is up

• Revenue is soaring

• Equity assets are maturing

• Cash is strong

I think it’s a bit silly to guess when a company will go public because so much of it is contingent on external market factors and internal politics we don’t have insight into.

But if I were forced to put a range on it, I would say that StartEngine could seriously start to consider filing to IPO in early 2027 - 2028.

One thing is certain - if/when StartEngine IPOs, this will be the quarter investors point back to and say, “That’s when the trajectory shifted.”