Withdrawing Capital

There are two cases in which a company can withdraw capital from the escrow account:

  1. The company has exceeded its minimum funding goal in "cleared" funds and the campaign has reached its end date.
  2. The company has elected ahead of time to permit multiple closes and can withdraw capital prior to the campaign reaching the end date, so long as the company has exceeded its minimum funding goal. Also, the campaign must be live for at least 21 days prior to disbursement. This means the company can withdraw several times prior to the end date being reached

Disburse Funds From Escrow

In order to begin the process of requesting a disbursement, you have to have exceeded your minimum funding goal by 20% of your cleared or disbursable funds. To view how much is disbursable, and if you have passed this threshold, you should:

  • Log into the company's StartEngine account
  • Click the account name in the top right corner
  • Select "Campaign Progress". Here you should see a line entitled "Funds Disbursable". If the amount shown is 20% greater than your minimum funding goal, then you are able to request a disbursement.

To request a withdrawal, email hello@startengine.com

Once StartEngine has confirmed that you can withdraw funds, you will need to provide notice to your investors that you are intending to do your first of multiple closes, giving them the ability to cancel one week in advance of when you have sufficient funds cleared. Here is how:

  • Log into the company's StartEngine account
  • Click the account name in the top right corner,
  • Select "Campaign Option".
  • Select "Manage Updates"
  • Type the title of the update and the message
  • Click Save

Example of an update from Green Sense Farms.

Once you have posted the notice as an update, you will send, using a Dropbox link, the required banking information to complete the wire transfer of your disbursement. This allows for secure communication.

You will receive an email that the transaction has been done and your account will automatically receive the wire in 5 business days.

Discrepancy of Funds

The total amount committed that a company will see in their dashboard will always be more than the actual disbursable amount at that time. The reason for this is because the amount committed is the total amount of indicated investment which includes not received investments (wire transfers that have not been initiated), cancelled and refunded investments and the investments that still need to clear.

An investment that still needs to clear may be because it is still undergoing the necessary trade reviews and Anti-Money Laundering verification checks OR it simply has not yet passed the 10 days it takes for an ACH to clear.

For all of these investments that have not yet cleared, we have a number of processes set up to reach out to each investor directly, multiple times, to address any outstanding issues and finalize their investment.


Exceeding $1,070,000

If your campaign is very successful and exceeds $1,070,000 deposited into the escrow account, then no funds can be withdrawn until the excess capital is refunded to investors. This is a regulatory requirement and not a company policy.

In the case that the escrow account is oversubscribed, you will have to wait roughly ten business days from the closing date of your offering for the escrow agent to refund the oversubscribed investors and close out the uncleared transactions. After the appropriate amount of investments have been refunded, you will have access to all the remaining funds less the StartEngine fees and transaction/escrow/closing fees.

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Disbursement

  1. Disbursement request must be submitted on the StartEngine Company Dashboard.
  2. Time estimate: 5 business days.
  3. You will be asked to verify the disbursements request going to your bank account, via email. Disbursements will not be processed until confirmation is received.