What Is Equity Crowdfunding? A Beginner’s Guide to Investing in Startups

What Is Equity Crowdfunding? A Beginner’s Guide to Investing in Startups

Alice ChambersAlice ChambersCrowdfunding
20255 minute read

If you’ve ever wished you could invest in a startup like Gameflip before it goes big, equity crowdfunding is your golden ticket. But what is it exactly—and how does it work?

This guide breaks it down for beginners and curious backers alike. Whether you’re hearing the term for the first time or wondering how platforms like StartEngine make it all possible, we’ve got the answers. Ready to learn how everyday people are becoming startup investors? Let’s dive in.


🎯 What Is Crowdfunding?

Crowdfunding is when a company or individual raises money by collecting small contributions from a large number of people—typically online. There are four primary types of crowdfunding:

  1. Donation-Based – People give money with no expectation of return (e.g. GoFundMe).

  2. Reward-Based – Backers receive a product or perk in exchange for their support (e.g. Kickstarter).

  3. Debt-Based – Investors lend money with the promise it’ll be paid back with interest (e.g. peer-to-peer lending).

  4. Equity Crowdfunding – Investors receive a small ownership stake in the company in return for their investment.

Equity crowdfunding is the model we’ll focus on here—because that’s how Gameflip is raising funds on StartEngine.


📈 So What Is Equity Crowdfunding?

Equity crowdfunding allows regular people (not just venture capitalists) to invest in startups or growing companies in exchange for actual equity (shares).

Thanks to regulations like the JOBS Act passed in the U.S. in 2012, companies can now legally offer shares to the public through regulated platforms like StartEngine, Republic, and Wefunder.

You don’t need to be a millionaire or a professional investor. In fact, many platforms allow investments starting at just $100–$250.


👥 Who Can Invest?

Most U.S. residents over the age of 18 can invest in equity crowdfunding campaigns. Some campaigns may set minimum investment thresholds, but the majority are open to:

  • First-time investors

  • Retail investors (non-accredited individuals)

  • Fans or customers of the company raising money

This opens the door for passionate communities—like Gameflip’s marketplace audience—to become shareholders.


🛠️ How Does It Work?

Let’s break the process down step-by-step:

  1. The Company Launches a Campaign
    The company (e.g. Gameflip) lists its offer on a regulated equity crowdfunding platform like StartEngine. It will include key information: business model, pitch video, revenue, future plans, and how much it aims to raise.

  2. You Create an Account
    Investors sign up on StartEngine or a similar site. The process includes identity verification and risk disclosures.

  3. Choose How Much to Invest
    You select your investment amount (often as low as $100). You’ll see exactly what you’re getting—how much equity your investment buys and what percentage of the company you’ll own.

  4. Payment Is Processed
    Payments can be made via ACH bank transfer, debit card, or sometimes crypto. Your funds are held securely until the round closes.

  5. Receive Confirmation & Ownership
    After the campaign ends and all compliance checks are done, you’ll receive documentation confirming your ownership—often in the form of a digital certificate or entry on a cap table.



🔐 Is It Safe?

All equity crowdfunding platforms are regulated by the U.S. Securities and Exchange Commission (SEC) and overseen by FINRA. That means:

  • Campaigns must be transparent

  • Investors receive full disclosures

  • Platforms follow strict compliance procedures

That said, all investments carry some level of risk—especially in early-stage startups. Always read the full offering circular, and invest only what you’re comfortable risking.


💡 Why Startups Love Equity Crowdfunding

Equity crowdfunding isn’t just great for investors—it’s a powerful tool for startups. Here’s why companies like Gameflip choose this model:

  • Raises capital without giving control to big VCs

  • Builds a community of invested supporters

  • Offers early fans and users a chance to own a piece of the future

  • Creates buzz and PR momentum during funding periods

It’s not just about funding—it’s about building loyal believers in the company’s mission.


🚀 Why Now Is a Great Time to Learn

The equity crowdfunding market is growing fast:

  • Over $1.1 billion was raised via Reg CF and Reg A+ offerings in 2023 alone.

  • Platforms like StartEngine and Republic have seen millions of new retail investors.

  • As more startups seek alternatives to traditional VC funding, investors get more access than ever before.

2025 is shaping up to be a banner year for crowdfunded startups, especially in future-facing industries like gaming, blockchain, and creator tech.


🕹️ Equity Crowdfunding Meets Gaming: Why It Matters

Gaming is one of the fastest-growing industries globally, projected to surpass $250 billion by 2026. As platforms like Gameflip expand digital marketplaces, player economies, and AI-powered matchmaking, the value proposition grows even stronger.

Equity crowdfunding in gaming is more than just a trend—it’s a chance to:

  • Support games and platforms you love

  • Help shape the future of game commerce

  • Potentially benefit from long-term growth as an early shareholder


📣 How Gameflip Is Using Equity Crowdfunding

Gameflip is currently live on StartEngine, offering users the chance to invest in its next growth phase. With over 6 million users, a thriving digital goods marketplace, and new service expansions on the way, the campaign is a rare opportunity to get in early.

Want to own a piece of Gameflip’s future?
 👉 Visit our investment page to know more!


🧠 The Democratization of Investing

Equity crowdfunding represents a seismic shift in how businesses raise capital and how individuals invest. It tears down the traditional gatekeeping of venture capital and opens startup investing to fans, users, and believers.

If you’ve ever wanted to back a company you truly believe in—equity crowdfunding gives you that power. And for companies like Gameflip, it means funding growth through a community that already cares.

Whether you invest or not, understanding how equity crowdfunding works is an important step in becoming a more informed, empowered digital citizen.

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