It was recently reported that securities crowdfunding data provider KingsCrowd had announced the acquisition of CrowdCheck.
CrowdCheck has been a mainstay in the securities crowdfunding sector. Founded by OG Sara Hanks, an attorney, CrowdCheck was one of the top legal firms assisting companies in filing documents for online securities offerings under the various exemptions. A combination of a fair price and deep experience made CrowdCheck a favorite firm for Reg A filings.
In 2024, Hanks sold CrowdCheck to entrepreneur Nicole Loftus. This past week, Loftus exited the business and sold it to KingsCrowd.
At the time, deal terms were not revealed, but according to a filing with the SEC, KingsCrowd purchased KingsCrowd for a cash payment of $500,000 and a promissory note in the amount of $4 million. The Asset Purchase agreement allows KingsCrowd to pay down the note over six years, subject to performance-based revenue payments, and is secured by the company’s assets.
KingsCrowd described the transaction as a significant expansion of the firm’s business operations in the legal and regulatory space. CrowdCheck will join the platform’s porfolio of services for private markets investing.
Like most early-stage firms, KingsCrowd is losing money and operating based on investor support. KingsCrowd is expected to soon pursue another funding round on StartEngine, where it aims to raise around $2.5 million at a pre-money valuation of $ 13.926 million.