Gain Exposure to Venture-Backed Companies in A.I. and Tech
The Howard Marks A.I. Fund helps pave the way for investors seeking exposure to this emerging industry — without spending millions of dollars.
$121.42 Per Share Minimum Investment $15,056
This offering is for membership interest in Series 1-1 of StartEngine Private Funds LLC (“Howard Marks A.I. Fund”) which will own shares of the companies below. You are not buying shares of these companies directly. See full details in footnote 1. This Reg D 506(c) offering is made available through StartEngine Primary, LLC, and the securities are being offered and sold only to accredited investors through general solicitation. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.
“These companies I’ve chosen are doing some pretty remarkable things in the A.I. sector. This fund lets you, as an investor, get exposure to A.I. Gone are the days where only VCs or the ultra-wealthy get in early. This is our turn.”
Fund Strategy
This fund is carefully curated based on Howard’s analysis on what sectors and companies he believes will power the future.
A.I. chips and computing hardware are specifically designed for tasks like machine learning and enhancing computing power. These components are optimized to accelerate A.I. processes, enabling faster and more efficient data processing and model training. They play a crucial role in advancing A.I. applications by providing the necessary computational capabilities.
A.I. platforms are software frameworks that support developing, deploying, and managing A.I. applications. They offer tools like machine learning model training and data processing, used to automate tasks and enhance decision-making.
Generative A.I. systems create new content like how ChatGPT functions. Using deep learning and neural networks, they generate outputs similar to real-world data.
Marketing technology, or MarTech, includes tools that help businesses execute and measure marketing campaigns. This includes CRM systems, analytics tools, and automation software, improving targeting and customer engagement.
Fund Breakdown
* While the Howard Marks A.I. Fund will endeavor to have a similar type of allocation, it may not be able to do so for reasons beyond its control, including limitations by a portfolio company on the transfer of securities, or the number of investors in the fund. In such a situation, the actual fund allocation may be different than the described intended allocation, resulting in a different risk profile associated with the fund and the underlying portfolio company securities. This graph represents the fund's composition assuming it reaches its maximum investment amount. If the fund does not reach its maximum investment amount, the actual amounts will vary in proportion to their percentage makeup as depicted in the Terms section.
A.I. & Tech Portfolio - Private Companies
Gain exposure to leading A.I. and tech companies hand selected by StartEngine CEO Howard Marks — and do it for a fraction of what it normally costs venture capital firms and the ultra-wealthy
$200B in Investments by 2025
The A.I. sector minted more companies with valuations exceeding $1 billion than any other sector in 2023,7 already adding to an A.I market that’s doubled since 2020 4, 41 with expectations of investments to exceed $200B by 2025 4
A Growing Industry in Private Equity
Artificial intelligence received 40% of all venture funding in May 2024 — that’s a 3X month-over-month increase from April 6
Global Monthly VC Funding to A.I. Companies (2024) 6
Howard Marks is the CEO and co-founder of StartEngine, a leading equity crowdfunding platform whose sole mission is to help entrepreneurs and investors achieve their dreams. He previously co-founded Acclaim Games, which was later sold to Playdom and then to Disney. Howard also served as the CEO of Activision Studios. He holds a Bachelor's degree in Computer Engineering from the University of Michigan and an MBA from INSEAD. Outside of his professional accomplishments, Howard is an avid chess player and often attributes his strategic thinking in business to his love for the game.
About the Portfolio Companies
SingleStore, a real-time distributed SQL interface company, provides a unified platform for transactions and analytics to power modern data-intensive applications. 9 The analytics software powered by A.I. touts itself as being a simpler and more cost-effective solution for its customers than Databricks — a $43B company according to Forbes. 10
Databricks is at a different development stage, so its valuation may not be directly comparable. Investors should not assume that investments in the Howard Marks A.I. Fund will increase in value. See footnote 10 below.
Raised to Date: $580M (through Series G)
Notable Investors: In-Q-Tel (CIA’s VC), Goldman Sachs, and IBM.
Leadership Team: Raj Verma, Former CMO, EVP of Global Sales, and COO of TIBCO, a $1B+ company. 11
ThoughtSpot provides a search and AI-driven analytics platform that allows users to easily explore and analyze complex data to gain insights. 12 Coined the "Only AI-Powered Analytics Built for Humans," its software is used by industry giants like Coca-Cola, CapitalOne, Comcast, and CVS. 12 According to Gartner Peer Insights, ThoughtSpot is compared favorably to Tableau, 13 a data analytics tool acquired by Salesforce for $15.7B. 13
Tableau is at a different development stage, so its valuation may not be directly comparable. Investors should not assume that investments in the Howard Marks A.I. Fund will increase in value. See footnote 13 below.
Raised to Date: $801.45M (through Series F-1)
Notable Investors: Khosla Ventures, General Catalyst, and Lightspeed Venture Partners.
Leadership Team: Ajeet Singh, Co-Founder. Formerly co-founded Nutanix, the largest tech IPO of 2016. 14
H2O.ai provides an open-source machine learning platform that enables businesses to build and deploy A.I. and machine learning models efficiently. 15 From helping doctors predict patient risks based on expression biomarkers to insurance companies sniffing out fraud, H2O.ai’s generative A.I. is powering over 20,000+ global organizations and over half the Fortune 500. 15 The company collaborates with leading tech giants like NVIDIA, IBM, AWS, Microsoft, and Google. 16
Raised to Date: $249.33M (through Series E)
Notable Investors: $240M+ raised by prominent VCs including Goldman Sachs, Barclays, CapitalOne, and the Commonwealth Bank of Australia.
Leadership Team: Sri Ambati, CEO. Formerly co-founded Platfora, a big data analytics company that was acquired by Workday. 17
Harness provides a continuous delivery-as-a-service platform that automates the deployment process, allowing software teams to deliver code changes quickly and efficiently.18 The A.I. Platform is a direct competitor to Microsoft’s GitHub, a $7.5B acquisition. 19 Harness A.I. technology ranked #1 in the Platform Engineering use case according to Gartner's 2023 Critical Capabilities for DevOps Platforms report. 20 Github is at a different development stage, so its acquisition valuation may not be directly comparable. Investors should not assume that investments in the Howard Marks A.I. Fund will increase in value. See footnote 19 below.
Github is at a different development stage, so its acquisition valuation may not be directly comparable. Investors should not assume that investments in the Howard Marks A.I. Fund will increase in value. See footnote 19 below.
Raised to Date: $424.4M (through Series D)
Notable Investors: 10X Capital, Citi Ventures, IVP, and more.
Leadership Team: Jyoti Bansal, CEO. Before Harness, the serial entrepreneur co-founded Traceable and AppDynamics, sold to Cisco for $3.7B. 21
Attentive provides a personalized text messaging platform for businesses to engage with their customers through targeted SMS and MMS marketing campaigns. 22 Crate&Barrel, Crocs, Dick’s Sporting Goods, H&M, Nespresso, Neiman Marcus, Samsung, and over 8,000 other major retail brands use Attentive for their marketing operations. 23 According to a recent press release, during Cyber Week 2023 (November 20-27) Attentive powered text resulted in $1.8 billion in sales for Attentive’s customers — 45% of which was A.I.-generated. 24
Raised to Date: $922M (through Series E)
Notable Investors: Sequoia, Base10 Partners, and Tiger Global Management.
Leadership Team: Amit Jhawar, CEO. Prior to Attentive, Amit worked as a Venture Partner at Accel, CEO of Venmo. 25
Outreach provides a sales engagement platform that helps sales teams automate and optimize their communication and workflows to increase productivity and drive revenue. 26 The platform is used by Cisco, McKesson, Okta, SAP, Siemens, Verizon, and 6,000 other major brands. 27 In 2023 alone, Outreach software helped book 2.6 million28 meetings while growing annual revenues 10X+ from $18 million in 2018 to $206 million. 29 The company ranked on Inc. Magazine’s list of the 5,000 fastest-growing companies in the country by revenue in 2020, 2022, and 2023. 30
Raised to Date: $487M (through Series G)
Notable Investors: Sequoia, Tiger Global Management, Salesforce Ventures, and Vista Equity Partners.
Leadership Team: Manny Medina, CEO. Prior to Outreach, Manny served as CEO for GroupTalent. 31
Recogni develops systems for autonomous vehicles, industrial automation, robotics and more. 32 In a recent interview on the A.I. energy crisis, Elon Musk stated that “next year, you’ll see they just can’t find enough electricity to run all the chips.” 33* While companies scramble to find energy solutions, Recogni takes a different approach: make chips that are more energy-efficient. 34
* Third-party statements do not imply an affiliation with the Howard Marks A.I. Fund or any endorsement.
Raised to Date: $155.9M (through Series C)
Notable Investors: Celesta Capital, Toyota Ventures, BMW i Ventures
Leadership Team: Former CEO of Starbucks and current Goldman Sachs board member Kevin Johnson is an acting board member. 35
PsiQuantum is working on building a large-scale, fault-tolerant quantum computer using silicon photonics in an effort to enhance computational power. 36 The company hopes to deliver the first quantum computing system in the next six years. 37 Alongside Microsoft, they were selected to move to the next phase of the Defense Advanced Research Project Agency’s (DARPA) Underexplored Systems for Utility-Scale Quantum Computing (US2QC) program. 38
Raised to Date: $665M (through Series D)
Notable Investors: Founders Fund, BlackRock, Palo Alto Growth Capital
Leadership Team: Professor Jeremy O’Brien, CEO. Has published over 150 papers with 38,000 citations; he demonstrated the first photonic 2-qubit logic gate, invented the field of integrated quantum photonics, co-invented the Variational Quantum Eigensolver (VQE), and implemented VQE on a photonic chip. 39
Total Venture Capital Investments in Howard Marks A.I. Fund Underlying Companies: $4.32B
Questions? We Have Answers
When I do invest, what am I purchasing?
Any investment you do make will be for membership interests in the Howard Marks A.I Fund (Series 1-1 of StartEngine Private Funds LLC) which will own shares of the underlying companies either directly or indirectly. You will not be investing in the underlying companies themselves.
How much of my investment will be allocated to each underlying company?
~8% will be allocated to Attentive
~12% will be allocated to Outreach
~6% will be allocated to H2O.ai
~11% will be allocated to Harness
~9% will be allocated to SingleStore
~17% will be allocated to ThoughtSpot
~25% will be allocated to Recogni
~12% will be allocated to PsiQuantum
While the Howard Marks A.I. Fund will endeavor to have a similar type of allocation, it may not be able to do so for reasons beyond its control, including limitations by a Portfolio Company on the transfer of securities, or the number of investors in the fund. In such a situation, the actual fund allocation may be different than the described intended allocation, resulting in a different risk profile associated with the fund and the underlying portfolio company securities.
This list represents the fund's composition assuming it reaches its maximum investment amount. If the fund does not reach its maximum investment amount, the actual amounts will vary in proportion to their percentage makeup as depicted in the Terms section.
What’s a series limited liability company or series LLC, you ask?
StartEngine Private Funds is the primary or “parent” LLC that comprises one or more distinct series of interest for each underlying asset. The series either directly or indirectly invests in and holds shares of the underlying companies. Each series will be a separate series and not a separate legal entity. Under Delaware law, if certain conditions are met, the liability of investors holding one series of interests is segregated from the liability of investors holding another series of interests and the assets of one series of interests are not available to satisfy the liabilities of other series of interests. In the case of StartEngine Private each series will be created for the purpose of holding an equity interest in stated underlying companies.
How do you determine the share price?
The series of StartEngine Private Funds purchases the underlying securities from an affiliate. The affiliate previously sourced and negotiated the terms to purchase these underlying securities from third parties. The amount paid by the series of the StartEngine Private Funds is higher than the price the affiliate purchased the securities previously in the secondary market. We also note that while StartEngine Advisers LLC does not impose any continuing management fee expenses, there is a carried interest of 20 percent associated with the investment in our series, and therefore to the extent the securities appreciate in value there will not be a one-to-one economic parity between the share value of the StartEngine Private shares and the underlying companies’ shares. Please read the “Risk Factors,'' which is included as Exhibit B to the subscription agreement for further details.
What happens to my investment when an underlying company has a liquidity event?
In the event that an underlying company experiences a liquidity event, after the relevant holding period is over, the proceeds from the sale of the shares will be distributed to investors, minus any applicable fund operating expenses or carried interest. Holding period length varies from company to company.
TERMS
| Company | Type of Share | Up to Total $ | Affiliate Acquisition PPS | Fund PPS* | Up to Shares | Allocation |
|---|---|---|---|---|---|---|
| Attentive | Series A-2 Preferred Stock | $159,997.50 | $15.60 | $22.50 | 7,111 | 8% |
| Outreach | Common Stock | $250,002.85 | $7.28 | $9.85 | 25,381 | 12% |
| H2O.ai | Common Stock | $123,284.00 | $4.88 | $8.50 | 14,504 | 6% |
| Harness | Common Stock | $212,536.00 | $9.46 | $15.50 | 13,712 | 11% |
| SingleStore | Common Stock | $192,640.00 | $3.09 | $5.00 | 38,528 | 9% |
| ThoughtSpot | Common Stock | $337,181.25 | $7.21 | $12.25 | 27,525 | 17% |
| Recogni | Common Stock | $500,000.00 | $15.45 | $25.00 | 20,000 | 25% |
| PsiQuantum | Common Stock | $240,000.00 | $6.18 | $12.00 | 20,000 | 12% |
This chart represents the fund's composition assuming it reaches its maximum investment amount. If the fund does not reach its maximum investment amount, the actual amounts will vary in proportion to their percentage makeup as depicted in the chart.
The value of the offered interests may not be directly equivalent to those of the existing shares of the underlying companies and may have differing material rights, including a carried interest fee of 20%. This offering is not eligible for any bonus shares. Any reference to bonus shares or similar terms should not be interpreted as an offer or entitled to bonus shares.
While the Howard Marks A.I. Fund will endeavor to have a similar type of allocation, it may not be able to do so for reasons beyond its control, including, limitations by a Portfolio Company on the transfer of securities, or the number of investors in the fund. In such a situation, the actual fund allocation may be different than the described intended allocation, resulting in a different risk profile associated with the fund and the underlying portfolio company securities.
*The amount paid by the Howard Marks A.I. Fund for the portfolio company securities is higher than the price StartEngine Crowdfunding Inc. previously paid for the securities in the secondary market.
Disclaimers:
1. The underlying companies are not participating or involved in this offering. The availability of company information does not indicate that the company has endorsed, supports or otherwise participates with StartEngine Private Funds LLC or any of its affiliates. StartEngine Private Funds LLC purchases shares from current and former employees, early investors, and advisors of the companies. When you make an investment in a company on StartEngine Private, you are purchasing an interest in Series 1-1 (“Howard Marks A.I. Fund”), a series of StartEngine Private Funds LLC, a Delaware limited liability company (the “Series LLC”), which was created to hold shares of privately held companies. An investor will not directly own or hold shares of the private company but instead will own member interests in a series of the Series LLC, which either directly or indirectly, will hold shares in the company. There may not be a one-to-one economic parity on the value of the Series LLC interests and the underlying shares.
The Howard Marks A.I. Fund is referencing Howard Marks, CEO of StartEngine.
StartEngine Advisers LLC manages the Series LLC and qualifies as an exempt reporting advisor (“ERA”) with the Securities and Exchange Commission pursuant to Rule 203(m)-1 under the Advisers Act.
24. Source: https://bit.ly/3SGIkur
The underlying securities of Howard Marks A.I. Fund offered herein are subject to restrictions on transferability and resale including a Right of First Refusal ("ROFR"). As such, the underlying companies have the first right to purchase the securities should Howard Marks A.I. Fund wish to sell or transfer them. This may affect the ability of Howard Marks A.I. Fund to dispose of the securities. Before investing, potential investors should carefully read the offering documents and consult with their advisor to understand the implications of these restrictions.
Expenses, including those for disposing of Portfolio Company Securities, extraordinary expenses, transaction fees (including brokerage fees), administration fees, and insurance fees, will be the responsibility of the Series. These expenses may reduce the amount you receive from a liquidation or distribution event. Additionally, StartEngine Primary LLC representatives may earn commissions for providing recommendations to investors in connection with this offering.
2. Unless otherwise indicated, the information on this webpage and our marketing materials for Howard Marks A.I. Fund is sourced as of June 19, 2024, from PitchBook, a website that maintains a record of the company’s funding rounds, along with their corresponding pre- and post-money valuations. As information on the company, including the valuations, are sourced from publicly available information, we do not guarantee their accuracy or completeness. The data and information may be subject to errors, omissions, or changes over time, and we are not responsible for any inaccuracies in the data and information provided. All the information contained on this page is derived from publicly available data and information, and has not been independently verified by us or any of our affiliates. This information should not be considered as financial or investment advice. Before making any investment decision you should consult your own financial, investment and tax advisors.
3. The minimum investment amount for this offering is $17,484.48
4. Source: https://bit.ly/3AofTLm
5. Source: https://yhoo.it/4cdz2Nl
6. Source: https://news.crunchbase.com/venture/monthly-funding-recap-may-2024/
7. Source: https://news.crunchbase.com/venture/unicorn-board-ye-december-2023-ai/
8. Source: https://bit.ly/4dtmAdy
9. Source: https://www.singlestore.com/
10. Source: https://bit.ly/3LTnOTB
Databricks is a different company and at a different stage of valuation. This comparison does not imply SingleStore will reach the same valuation. Past performance and valuations of other companies are not indicative of future results of SingleStore, and investors should not assume that investments in Howard Marks A.I. Fund will increase in value.
11. Source: https://www.singlestore.com/company/raj-verma/
12. Source: https://www.thoughtspot.com, https://www.thoughtspot.com/customers
13. Source: https://gtnr.it/3LScerS , https://bit.ly/3LTnSCP
Tableau is a different company and at a different stage of valuation. This comparison does not imply ThoughtSpot will reach the same valuation. Past performance and valuations of other companies are not indicative of future results of ThoughtSpot, and investors should not assume that investments in Howard Marks A.I. Fund will increase in value.
14. Source: https://www.thoughtspot.com/team
15. Source: https://bit.ly/3LSHSW9
16. Source: https://getlatka.com/companies/h2o.ai
17. Source: https://h2o.ai/company/team/leadership-team/
18. Source: https://www.harness.io/
19. Source: https://bit.ly/3WznDSv , https://bit.ly/4cegrAI
GitHub is a different company and at a different stage of valuation. This comparison does not imply Harness.io will reach the same valuation. Past performance and valuations of other companies are not indicative of future results of Harness.io, and investors should not assume that investments in Howard Marks A.I. Fund will increase in value.
20. Source: https://www.harness.io/blog/why-platform-engineers-trust-harness-gartner
21. Source: https://www.harness.io/company/about-us, https://bit.ly/4dtQWN5
AppDynamics is a different company and at a different stage of valuation. This comparison does not imply Harness.io will reach the same valuation. Past performance and valuations of other companies are not indicative of future results of Harness.io, and investors should not assume that investments in Howard Marks A.I. Fund will increase in value.
22. Source: https://www.attentive.com/
23. Source: https://bit.ly/3Yu64Wx, https://bit.ly/3SyWXjq, https://www.attentive.com/
25. Source: https://www.attentive.com/authors/amit-jhawar
26. Source: https://www.outreach.io/
27. Source: https://prn.to/46DXHd4
28. Source: https://www.outreach.io/resources/blog/2023-recap
29. Source: https://getlatka.com/companies/outreach
30. Source: https://www.inc.com/profile/outreach-corporation
31. Source: https://www.linkedin.com/in/medinism
32. Source: https://www.recogni.com/
33. Source: https://newatlas.com/technology/elon-musk-ai/
34. Source: https://bit.ly/45d4auL, https://bit.ly/4cccHjS, https://bit.ly/4aZqNEa
35. Source: https://www.linkedin.com/in/kevjohns, https://prn.to/3VsTncq
36. Source: https://www.psiquantum.com/
37. Source: https://bit.ly/4c90Xy8
38. Source: https://www.darpa.mil/news-events/2023-12-14a
39. Source: https://www.psiquantum.com/about
41. Source: https://bit.ly/3WRutE6
This Reg D offering is made available through StartEngine Primary, LLC, and sold only to accredited investors through general solicitation pursuant to Rule 506(c) under the Securities Act. An accredited investor is an individual or entity that meets specific home or net worth requirements as defined by the Securities and Exchange Commission.
The securities being offered have not been registered under the Securities Act of 1933 or any state securities laws and are being offered and sold in reliance on exemptions provided by Regulation D.
This offering is speculative and illiquid, and investors should be prepared to hold the securities for an indefinite period. Investing in securities involves risk, and there is the possibility of losing your entire investment. Neither StartEngine nor its affiliates provide investment advice or recommendations, nor do they offer legal or tax advice regarding any securities.
Investors should carefully review all offering documents, including the private placement memorandum, subscription agreement, and any other relevant materials before making an investment decision.