How Gab Has Raised Millions Thanks to This Crowdfunding Company

 

by John Dougherty and Michael Edison Hayden

Three months after a man radicalized on Gab.com killed 11 Jews in a Pittsburgh synagogue, the social media website that has become a hub for white nationalists and neo-Nazis remains financially viable thanks to an Obama-era law and an online crowdfunding broker, a Hatewatch investigation reveals.

The JOBS Act of 2012 was designed to help startup companies use crowdfunding to raise up to $1.07 million a year. The law has allowed Gab’s parent company, Gab AI, Inc., to raise $2 million since 2017 from two crowdfunding rounds handled by StartEngine Crowdfunding, Inc., a Los Angeles securities brokerage firm that helps companies prepare regulatory filings and sell investment shares to the public.

A handful of investors – 1,000 in 2017 and 1,900 in 2018 – purchased $1 million of highly speculative securities in Gab through StartEngine, providing the company enough capital to allow it to continue to operate.

Revenue has otherwise been scarce. Payment processors like PayPal and Stripe dropped Gab in the aftermath of the Oct. 27, 2018, terror attack at the Tree of Life Synagogue, causing a 90 percent drop in subscription revenue from premium services, Gab stated in a Dec. 19 Securities and Exchange Commission (SEC) filing.

The company was relying on snail mail and cryptocurrency to sell premium subscription services, but announced on Tuesday it formed a relationship with an obscure company called 2nd Amendment Processing to help with future credit card payments.

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Source: The Southern Poverty Law Center