Nov 20, 2016 · 29m · top-founders
EP 484: $7M Raised with StartEngine CEO and CrowdFunding SnapWire CEO
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Top, host Nathan Latka interviews StartEngine CEO Ron Miller and Snapwire CEO Chad Newell to examine the operational and legal mechanics of Title III equity crowdfunding. The conversation explores platform economics, community shareholder conversion, cap table architecture, and SEC compliance for scaling modern startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 47.4% of the talking time here. How this is scored →
Nathan as informed peer 3.7 Guest teaching 2.3 Guest disagreement 1.2 Nathan pushing back 2.8
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:03 Dismissing the Book Question
Chad abruptly rejects Nathan's standard opening rapid-fire question by repeatedly saying 'next question' without offering a title.
Hardest push from Nathan ▶ 12:09 Retail Investor Downside ProtectionNathan directly challenges the equity crowdfunding premise by arguing unsophisticated retail investors will not understand liquidation preferences or future round dilution.
Biggest teaching moment ▶ 6:50 1933 Securities Act HistoryRon educates Nathan on the origin of accredited investor rules from 1933 and explains how Title III fundamentally alters early-stage startup wealth creation.
Nathan holds their own ▶ 12:09 Technical Venture Math DrilldownNathan demonstrates high-level venture finance literacy by laying out a scenario involving 2x liquidation preferences, ratchet clauses, and preferred stock waterfall wipes.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Weekly Listener Winner and Review Contest Announcement | 4 | 2 | 1 | 1 | Nathan introduces both guests and unpacks StartEngine's business model. He does quick math on their gross transaction volume to estimate their revenue at five percent. | |
| Title III Regulations and Snapwire's Crowdfunding Strategy | 3 | 5 | 1 | 2 | Ron details the history of SEC regulation since the 1933 Securities Act. Nathan openly admits lack of expertise in Title III crowdfunding and asks why it is a radical shift from standard venture capital. | |
| Snapwire Marketplace Economics and Creator Demographics | 7 | 3 | 2 | 6 | Nathan presses Chad on why retail investors would buy equity over product, then mounts an informed challenge about how unsophisticated retail investors can understand liquidation preferences, ratchet clauses, and dilution. | |
| Mitigating Legal Risks and Cap Table Complexity | 6 | 4 | 2 | 5 | Nathan raises cap table litigation risks during due diligence and hypothecates a predatory micro-investor. Ron counters by explaining the economic inversion of litigation risk for small check sizes. | |
| SEC Disclosure Compliance and Competitive Transparency | 5 | 4 | 1 | 4 | Chad explains SEC biannual disclosure and tombstone ad rules when Nathan asks whether he can quote active portal figures. Nathan points out that public filings expose financials to direct competitors. | |
| StartEngine Operations, Capitalization, and Market Competitors | 5 | 2 | 2 | 5 | Nathan digs into StartEngine metrics and jokingly confronts Ron on why he took traditional venture capital rather than eating his own dog food on StartEngine. | |
| Sponsor Segment: Drip Marketing Automation | 0 | 0 | 0 | 0 | Solo host ad reads for Drip email marketing software and HostGator hosting services. | |
| The Famous Five Rapid-Fire Questions | 3 | 1 | 2 | 2 | Chad bluntly passes on the favorite book question. Nathan continues the Famous Five questions and checks if equity crowdfunding deals require individual shareholder exit signatures. | |
| Episode Summary, Guest Recap, and Next Show Preview | 0 | 0 | 0 | 0 | Solo host outro summarizing the StartEngine and Snapwire interviews and previewing the next episode. |
Statements from this episode (15)
Miller: StartEngine has 60,000 community members and around 13,000 investors
“We've got about 60,000 unique individuals who have participated in our community, and of which I'd say something like 12 or 13,000 have become actual investors.”
Newell: Snapwire secured $3M in investor reservations before Title III pivot
“Start engine and snap where I had worked together to run a test the waters campaign to Weeks before we actually switched gears and went to title three three million dollars of reservations from potential investors when we thought we were going to do a title fo…”
Newell: Snapwire raised $2.1M in traditional venture debt
“As you'll remember, I did this log in raising two and two and 2.1 million dollars in traditional venture debt.”
Newell: Snapwire has 300,000 photographers across 180 countries
“Well, you know, on Snapwire, we have a community of 300,000 photographers in a 180 countries who are all on the platform willing to, wanting to sell their images to image buyers.”
Newell: Snapwire revenue is split 50/50 between SaaS and pay-as-you-go
“Right now it's 50, 50 split, but the returns per image are a little bit different than either camp.”
Newell: Snapwire has licensed 9,000 photos from 7,000 photographers
“There have been 9000 photos moved through the system through about 7000 photographers.”
Miller: Crowdfunding rules let companies set their own terms
“One of the main advantages for companies raising capital under these rules is that they get to set the terms.”
Chad Newell: Snapwire has never done a priced round
“In Snapwire's world, we raised venture debt, so convertible notes. We have never done a price round.”
Miller: Large VCs pose higher exit litigation risk than retail crowdfunders
“I think there's an inversion of risk, and here's what it is, if you have Other sophisticated venture capital, super angels, high net worth individuals in your round, and something along the lines of what you described occurs, where there's an exit, but for som…”
Newell: Title III rules require all deal communication directly on funding portals
“Legally. No, you're not allowed to. The idea that this is basically a tombstone ad and the spirit of title three is to let the cloud, excuse me, the crowd collectively decide that If Snapwire is a sound investment, all communications about the deal, the terms …”
Miller: StartEngine has hosted 15 to 18 company raises to date
“I think that there are a total of 15 to 18 companies.”
StartEngine is considering raising on its own platform next year
“That was a action unsolicited outside, outside investor that came in, but we are contemplating doing so next year.”
Newell: Title III crowdfunders do not require individual acquisition signatures
“You know, these are common stockholders, and you know, when we do sell the rights of the acquirer, if we do, if we went down that path would just fall under the terms of the deal, and also the terms of the current offering that we're offering. So, in other wor…”