7 Questions for Leon Benrimon, Vice President of StartEngine, the Tech Platform Disrupting Collecting – artnet News | Candle Made Easy

TV show fans shark tank may remember the emergence of StartEngine, a crowdfunding platform that helps startups and investors connect, a few years ago (it received a seal of approval from host Kevin O’Leary).

StartEngine also wants to attract art lovers. The Los Angeles-based platform, founded in 2015 by Activision’s Ron Miller and Howard Marks, offers clients the opportunity to make fractional investments in blue-chip art.

By crowdfunding fractional artwork ownership, StartEngine offers both art enthusiasts and novice investors alike the opportunity to reap the benefits of fractional ownership of an artwork without these barriers to entry,” said Leon Benrimon, who previously worked with Heritage Auctions and joined StartEngine as an independent dealer as Vice President.

We recently spoke to Benrimon about StartEngine and why the art world should take notice.

How would you explain StartEngine in just three or four sentences?
StartEngine is one of the leading equity crowdfunding platforms in the US, allowing ordinary people to find and invest in fledgling companies and startups, as well as a variety of alternative assets. StartEngine has helped more than 500 companies raise $500 million from a community of over 750,000 potential investors. In 2021, StartEngine expanded its services to offer collectibles such as art, comics, sports cards and fine wine.

What should art lovers know about StartEngine? How can it be a tool for collectors?
StartEngine offers art lovers and collectors a unique opportunity to invest in highly recognizable artworks without having to deal with the obstacles that can typically make art investing problematic. Investors can buy shares in the company that owns the artwork for as little as $10 (on some artworks). StartEngine enables art collectors to invest in art without worrying about the due diligence process, fair market value evaluation, shipping, authenticity and provenance on the purchase side, and insurance, custody and annual assessment of long-term management to have side.

Finally, StartEngine can offer collectors a way to sell their investments in artworks by offering a secondary market stock trading platform for investors who wish to sell their stocks before the artwork is sold, or for those who wish to wait until the artwork is sold sold is sold, handling the entire sales process including offering artworks at auction, through a dealer or through private transactions, accommodating a potential viewing, shipping and payment, and other logistics. Although there are plans to trade these shares on secondary markets as we mention on the page, trading on secondary markets is subject to certain requirements and even if the shares are traded it is important to understand that there is no guarantee that the market will develop or develop that the shares are trading above the price you paid for them. All in all, StartEngine is the future of effortless investing in art.

banksy, laugh now. Courtesy of StartEngine.

You have an artistic background. Can you tell us about it and how you came to StartEngine?
I think my move to StartEngine is kismet. As some may know, I was very fortunate to grow up surrounded by art and the art world. My family has been involved in the art world for as long as I can remember. After closing my main art gallery in Chelsea, Benrimon Contemporary, I was faced with a difficult decision: join Heritage Auctions, who had offered me a fantastic position, or go out and start a startup called ArtShares, which makes it possible for collectors would invest partially in works of art, using the crowdfunding laws of the time. The fractional ownership model was introduced to me by a friend who was starting a similar music royalty platform and another who was doing it with luxury yachts.

I have chosen Heritage Auctions, a company where I have spent almost seven wonderful years. When a family member put me in touch with Howard Marks, the founder of StartEngine, who explained what the platform was doing and where it was going to expand, it felt like destiny had brought me back to the same spot where I was was seven years earlier. Having thoroughly enjoyed my time at Heritage, it felt like the right time to revisit the idea I never got to explore. My meeting with Howard was an instant click, I understood this StartEngine which was already great Success in the world of startups was destined to change the face of modern investing, offering investors a variety of investment options to complement the traditional offerings of stocks and bonds.

What do you think are the biggest barriers to entry into the art world?

Unfortunately so many. As an art lover for my entire life, my biggest annoyance is that so many find it difficult to start collecting art. I think the biggest obstacle is the financial means to buy a blue chip piece of art, which is usually expensive and therefore off-putting to the average art lover. Even if one could overcome this hurdle, a significant learning curve is required between the players of the primary market and the secondary market. Imagine if you start collecting you need to educate yourself about the players in both marketplaces, know how to conduct due diligence, estimate fair market value, research shipping, insurance and storage solutions, not to mention conservation and framing. All this just to acquire a work, and then a similar set of problems when it comes time to sell the work. While I love art, it’s clear that the art world thrives on an inefficient model that makes entering the market challenging for the average art lover.

What are the benefits of fractional ownership of a work of art? Is it purely an investment?
While fractional ownership may appear on the surface to be purely an investment, I would argue that it serves a much larger purpose. For years, particularly during my time at Heritage, I have encouraged collectors to start buying lower value prints and photographs as an entry point into the market. Although I still love these two mediums, they are not comparable to painting, sculpture and drawing; and what’s more, they’ve risen to sub-entry levels for most blue-chip artists. Fractional ownership gives inexperienced collectors the opportunity to acquire ownership and all that goes with it in recognized blue-chip works. I believe that much fractional ownership will be the new gateway to art collecting that prints and photographs (or, one could argue, NFTs) have traditionally served. I firmly believe fractional ownership is the future of collecting.

What guarantees does StartEngine offer collectors in terms of provenance and authenticity?
Great question. StartEngine carries out thorough due diligence on authenticity, provenance, literature and exhibition history with the help of a network of trusted consultants and experts. StartEngine ensures the authenticity and provenance of each object on the platform before offering it to the public.

Who are the ideal collectors you want to attract?
All! When I first met with StartEngine founder Howard Marks, I explained to him that fractional ownership is not a new concept in the art world. For as long as I can remember, dealers, consultants, and even some collectors have bought works for obvious reasons. Traditionally, art hasn’t been as liquid as other investments, so syndication was a necessity for dealers looking to expand their inventory, so my first thought was that dealers would love the idea. However, it has become clear that fractional ownership appeals to the entire art world, dealers, gallery owners, consultants, collectors and investors alike.

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