May 1, 2020
Dear SEC Staff:
As a crowdfunding success story, I just wanted to voice my support for the rule change of the maximum funding for regulation crowdfunding increasing from $1.07 million to $5 million.
My company, Generation Genius, Inc. raised $1.07 million on the StartEngine platform in May 2019 and that funding has been instrumental in helping us grow, create jobs and help the future generation of America.
My company creates educational videos and lessons that help kids learn science. It is a public benefit corporation. We had a very challenging time raising money from VCs, who did not like the mission aspect of what we do. In less than a month of crowdfunding, we have 700+ individuals invest an average of $1,400 and we had 300+ investors waitlisted because we were limited to $1.07 million.
My company is on pace this year for $5+ million in revenue for 2020, up from $460,000 in 2018, a 10x growth.
We would not even exist today without the opportunity crowdfunding provided for us.
The rule change to increase the maximum to $5 million would open this up to a lot more companies. The limitation of $1.07 million is one of the reasons more VC-quality companies do not participate in the process. The average 2020 seed round in the US from VC funding is $2.4 million. Now with COVID-19 affecting the availability of capital, it is more important than ever that startups have this fundraising route as an option, so they can grow and create jobs. Currently, Reg CF is a plan B for companies that cannot raise transitional capital, with the proposed rule changes enacted, for many it will be plan A.
It has helped me and I hope it can help others.
Best,
Dr. Jeff Vinokur
Founder CEO
Generation Genius, Inc.