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Investors FAQ

Getting Started

  • What is Wefunder?

    We help everyone invest as little as $100 in the startups they love.  

    You can think of us like “Kickstarter for investing”. 

    Unlike Kickstarter, you are not buying a product or donating to an artist. Instead, you are investing in a business with the hope of earning a return on your investment. 

    You decide which companies are worthy of funding. If the business does well, you may make money.  If it doesn’t do well, you lose all your money. 

    Either way, you join a community of other investors who seek to help the startup succeed. You sometimes get neat perks from the companies too.

  • How is Wefunder different from the stock market?

    Startups on Wefunder are much earlier-stage than companies listed on the NASDAQ or the New York Stock Exchange. Here are a few big differences:

  • Wait… how is this legal?

    Starting in May of 2016, thanks to a new law called Regulation Crowdfunding, it became legal for everyone to invest small amounts of money in the startups they believed in. 

    From 1933 to 2016, it was illegal to make an investment in a private company unless you were an “accredited investor” (i.e., rich).

    We started Wefunder to fix that, because we weren’t rich, and we wanted to invest in our friends. The first thing we had to do was convince Congress to change the law. We managed to do that, and here we are today!

  • Why should I invest in startups?

    It shouldn't be to make lots of money! This isn't the stock market. Startups are much riskier and more likely to fail.  Greed is a bad reason to invest.

    Of course, if you invest wisely, you can make money.  Our advice?  Invest only in what you understand (and preferably love). If you are a customer and love the product, then it’s more likely it’s a good investment. If you don’t understand it, it may be a bad idea to invest. 

    Our opinion is that investing should not be solely about earning a return. To invest in something as risky as a startup, you should feel something extra, beyond just the business model.  For us, that “something extra” is the fulfillment we feel helping a founder take "their shot" at making our world a slightly better place. We also think it’s pretty cool to learn about different industries when we get updates from the founder.

  • Any tips for a first-time investor on Wefunder?

    Our advice?  Start off slow.

    1. Expect to lose it all. Never invest more than you can afford to lose.

    2. Only invest in what you understand. Preferably, a product or mission that you love.

    3. Do your research. You also can ask the founders a question on their company profile.

    4. Diversify. It’s better to make multiple small investments rather than one large one. Plus, it’ll help you learn more.

    5. Look at the Lead Investor.  Has a more experienced investor invested in the company, under the same terms as you?  Why are they investing?

    For more tips, head over to Startup Investor School – an entire video series of tips from the world's best startup investor, Y Combinator.

    Note that these are tips, not investment *recommendations,* and you should make your own decisions when deciding what to invest in.

  • What kind of companies are on Wefunder?

    As we like to say, nearly the entire American economy! That’s the fun part! We’ve funded tens of millions of dollars in startups like:

    • Moonshots like flying cars, space telescopes, and fusion reactors
    • Neighborhood businesses like café’s, restaurants, and breweries
    • Software like mobile apps and online education
    • Biotechnology like glowing plants and researching cancer cures
    • Entertainment like Hollywood studios and immersive theater
    • And much, more!

    The one commonality? All of the companies that raise successfully on Wefunder have a loyal community of people who believe in them. 

  • After I invest, how often should I expect updates?

    Wefunder recommends that founders update to their investor at least once per quarter, but you can also ask the founders for an update in the Q&A section of their fundraise page.

    Most companies are also legally required to issue an Annual Report 120 days after the end of their fiscal year. The annual report is a more comprehensive update with their latest financials, board members, new financings, and more. In some instances, they may no longer be required to file this information, though we encourage them to do so anyways. Most companies have their fiscal year end on December 31st, and their annual reports come out by April 30th

  • Is Wefunder regulated?

    Yes!  The SEC and FINRA wrote around 1,000 pages of regulations that we work diligently to comply with.

  • Where does my money go after I invest?

    Wefunder is prohibited by law from touching your money.

    When you invest, your funds are transferred to an escrow account, in custody of Boston Private Bank.  If the fundraise succeeds, your money will be released to the startup. Otherwise, it will be refunded to you. 

  • Do you recommend good investments?

    No!  It’s illegal for us to endorse or recommend any company. 

    But even if it wasn’t illegal, we don’t want Wefunder to be a “gatekeeper” that picks and chooses which ideas are worthy of funding. That’s for you to decide.

    No company on Wefunder – no matter where it appears on our web site – is endorsed by us.  Also, while we may sometimes help companies “make their profiles look pretty,” all of this information is provided and fact-checked as true by the companies, not us.     

    While we don’t vet ideas, we do our best to screen for fraud, such as researching the founders and verifying that the documents they’ve provided comply with the law. 

  • Why did you create Wefunder?

    Initially, we created it for ourselves. We wanted to invest in our friends.  We also wanted to support causes we cared about with our dollars, like revitalizing American manufacturing or researching cancer. We see every startup as a social movement to change the world in one specific way. We wanted to join more of those movements, and help where we could. 

    That’s also why we became a Public Benefit Corporation.  We aim to make capitalism work better, by sprinkling the Silicon Valley fairy dust across the rest of America. We want to help thousands more potential founders get off the ground and take their shot. 

    Join us!

Risks

  • Just how risky are startups?

    Very! You should only invest what you can afford to lose. Do not invest so much that it would impact your lifestyle or retirement plans. Every investment listed on Wefunder is much riskier than a public company listed on the stock market. It is entirely possible that you will lose every dollar you invest on Wefunder.

  • How can I decrease the risk?

    You are more likely to avoid loss by diversifying your investments, focusing on areas in which you have expertise, and investing in startups whose products you passionately use. Even professional investors have a difficult time predicting exactly how startups will earn money in the future (e.g., Google in 1999). Investing in what you know and find personally valuable is an important signal of a good investment.

  • How many investments should I make?

    We recommend making several small investments each year rather than one large one. For instance, if you decide you can safely invest $5,000 per year in startups, it'll be less risky to make ten $500 investments instead of a single $5,000 one. You should never invest more than you can afford to lose.

  • Is an equity investment appropriate for me?

    If you can't afford to lose every dollar you invest on Wefunder, the answer is no. If you can't afford to wait 7+ years for a return, the answer is also no.

    You might have a strong belief in the future success of a company, but it's safer to think of an equity investment as a lottery ticket that might pay off in the very long term.

    Unlike the stock market, investment outcomes are much more binary (complete failure or wild success), and there's no stock market that'll allow you to easily re-sell your investment stake to someone else unless the company is acquired or prepares for an IPO.

  • Is a debt investment appropriate for me?

    Compared to equity investments, loans can be slightly less risky, but also have a smaller upside. You should still assume that even a loan will not be paid back. Never invest more than you can afford to lose.

  • Can I easily resell my investment?

    It's safest to assume you cannot resell your investment to another investor. First, there is not yet a liquid secondary market like the New York Stock Exchange for private companies (yet). Regulation Crowdfunding also specifically prohibits the resale of securities for one year, except to the issuer, an accredited investor, a family member, or their trust.

  • Will my percentage ownership be diluted?

    Yes. An equity stake will almost certainly be diluted.

    Successful startups host many rounds of financings, all the way to an IPO. For each financing, the startup issues additional stock to the new investors. As long as the value of the company increases with each funding round, this is healthy and normal. For example, the first investor in Facebook, Peter Thiel, originally purchased ~10% of the company for $500,000. By 2011, that stake was diluted down to under 3%, but estimated to be worth ~$2 billion.

    Sometimes, when things are not going well, the startup is given the option of going bankrupt or raising more money in a "down round," which means the value of the company decreased since the last financing. This is very bad for the founders and past investors alike; the dilution happens much more rapidly. But it's preferable to the startup going bankrupt and the investors losing everything.

  • Will the startup use Wefunder in the future?

    Wefunder provides startups free continued access to our platform, but there is no guarantee they will continue using our services.

Lead Investors

  • What is a Lead Investor?

    The Lead Investor is an investor who is familiar with the startup and decided to invest on the same terms as those offered on Wefunder.  More importantly, the Lead Investor directs the voting power of all Wefunder investors. 

    When deciding whether to invest in a company, you should look at who the Lead Investor is, see how much they invested and why, and make your own decision on if you trust their judgement. 

    Note that Wefunder does not endorse the views or activities of any Lead Investor and our approval of a Lead Investor does not constitute an investment recommendation.

  • What does a Lead Investor do?

    The Lead Investor:

    1. Decides if they want to invest on the same terms as those offered on Wefunder.

    2. Directs the signing of documents on behalf of all investors on Wefunder, such as SAFEs converting to equity, follow-on financing authorizations, acquisitions, or any other corporate action. These are the same documents a Lead signs for their personal investment.

    Note that Wefunder does not endorse the views or activities of any Lead Investor and our approval of a Lead Investor does not constitute an investment recommendation.

  • Do I have voting rights?

    All securities sold on Wefunder with a Lead Investor have voting rights unless explicitly stated otherwise. However, these voting rights are directed by the Lead Investor.  

  • Can we fire a Lead Investor?

    Yes. If there is evidence of behavior that is against the best interests of the company or a serious conflict of interest, Wefunder can intervene in extraordinary circumstances. 

    Depending on the circumstances, Wefunder can remove the Lead Investor, organize a vote of all Wefunder investors on whether to remove the Lead Investor, and/or organize a vote of all Wefunder investors on a particular voting decision for which the Lead Investor has a conflict of interest.  

  • Will the Lead Investor be paid?

    No, they won't be compensated for their role as a Lead Investor. But, they may be appointed as portfolio manager to an SPV formed by Wefunder in a future Reg D round, for which they could receive carried interest.

SPVs & Custodians

  • How do SPVs work?

    To ease logistical burden for founders and solve problems with having too many stockholders on the cap table, we are now using special-purpose vehicle (SPVs) for most new fundraises. This means we'll set up an LLC that exists for the sole purpose of investing in each startup. All investors pool their capital into the SPV, which then invests in the company as 1 entity. If there are early bird terms, a separate SPV will be set up to hold the early bird investors. 

    We'll set up these SPVs at no extra charge to companies or investors.

  • Why do startups use SPVs?

    Startups use SPVs to ensure their future growth and follow-on financings won’t be at risk. Having too many individual stockholders can make venture capitalists skeptical, require companies to go public before they're ready, and make gathering stockholder approvals a challenge. 

    With an SPV, founders can have an unlimited number of smaller investors grouped into one large entity, with voting power directed by a Lead Investor.

    For more info on how SPVs solve some tricky legal issues in structuring investments, see here.

  • Who manages the SPV?

    For most new SPVs, the manager is Wefunder Admin, LLC, who then delegates voting decisions to the Lead Investor.

    For legacy Reg D SPVs and those set up for certain purposes such as investing in follow-on financings, the manager is Wefunder Advisors, LLC.

    The manager of the relevant SPV is indicated in the Subscription Agreement that investors sign when they invest through an SPV.

  • Will I be investing via the custodian or SPV?

    It depends on the offering. If the company is using the custodian or SPVs, that will be clearly indicated in the legal disclosures in their Form C. 

    As of March 15th 2021, we have seen many companies use SPVs, although some companies still choose to use the custodian. 

    Most raises that launched between May 2020 and March 15th, 2021 used the custodian. 

  • What is a Custodian?

    A Custodian is an entity (such as a broker-dealer, bank, or transfer agent) that holds any securities on behalf of all investors (who are the "beneficial owners" of the securities).  

    This means investors do not actually possess the shares, convertible notes, or SAFEs. Instead, the Custodian holds them on their behalf. All voting rights of securities are delegated to the Lead Investor, who directs the Custodian on how it should vote the investor securities. This makes the Custodian the only entity listed on the cap table, because it is the record holder of all the securities. 

    On Wefunder, XX Investments LLC - an SEC-registered transfer agent - acts as Custodian for all securities sold on the platform that use the Custodian structure.


  • Why are my securities held by the XX Custodian?

    Using a Custodian increases the quality of startups that use Wefunder while also giving more voting power to investors on Wefunder. 

    • Access to higher-quality investments.  With a Custodian, higher-quality startups with other fundraising options are more willing to use Wefunder. Startups use a Custodian to ensure their follow-on financing won't be at risk. Venture capitalists are uncomfortable when startups have many small investors directly on the cap table  (they don't like collecting thousands of signatures). With a Custodian, all those smaller investors are represented by one entity on the cap table: XX Investments LLC. 

    • Concentrate investor voting power into one Lead Investor.  Before Custodians, almost no companies that crowdfunded offered voting rights to their investors.  Now, all voting rights are held by the Custodian, which must vote as directed by the Lead Investor. The Lead Investor is financially incentivized to fight for the rights of all investors on Wefunder.  

Earning a Return

  • How do I earn a return?

    The amount you may earn depends on the type of investment contract the company is offering.

    There are four classes on Wefunder:

    • Debt.  Some local businesses offer a simple loan or revenue share.  A simple loan, just like your car loan, has a fixed repayment schedule known in advance.  Unlike a loan, a revenue share returns a fixed amount of money (such as 2X your investment), but the time it takes to repay depends on how well the business does.  The faster the business grows revenue, the faster you earn a return, and the higher your effective interest rate.  

    • Convertibles. Most early-stage technology startups use a Convertible Note or Simple Agreement for Future Equity. These will convert your investment to stock at a later date if the company raises a "priced round" from major investors, most often venture capitalists. At this point, you are a shareholder owning equity, and you earn a return if the value of that stock goes up over time, and you are able to sell it.

    • Stock, No Dividends. When a startup is at a stage where they can afford to pay lawyers tens of thousands of dollars, they will do a "priced round". Like the stock market, you are buying equity at a fixed price per share (or unit for LLCs). If the company is successful, the value of the stock can increase with each subsequent round of financing, until the company is acquired or goes public. Then you earn a return.

    • Stock, Dividends.  While a tech startup almost never offers dividends, a later-stage local business - such as a brewery opening a second location - often will.  The type of dividend can vary.  Some might offer a fixed dividend per share per year. Some might offer a percentage of profits.  A common scenario is also to "swap" the dividend after your investment is repaid.  For instance, a brewery might share 80% of its profits until the investors are repaid, and then 20% thereafter in perpetuity.
  • How long until I see a return?

    The amount of time it takes to see a return is highly dependent on the type of investment contract.

    • Debt. A simple loan will define the number of months until it is paid back. For a revenue share, it depends on their projections for future revenue. The faster the business makes money, the faster you will see a return.

    • Convertibles & Stock with No Dividends. You are waiting until the company goes public or is acquired. This can take a very long time. It took the early investors in Harmonix (the creators of Guitar Hero) over 10 years to earn a return.

    • Stock with Dividends.  This depends on the specific investment agreement. Typically, dividends are a percentage of profits. Therefore, the amount of time to see a return depends on how profitable the business is.
  • How is the valuation determined?

    Market demand determines the valuation. Valuation shifts with time, depending on the amount of capital chasing startups. Right now, early-stage high-growth startups are often valued at $3 to $20 million for their first financing. Lifestyle businesses are valued at less. Companies that have raised several rounds of financing and are further along are worth far more.

    In order to get a sense if a valuation seems reasonable, look at who the Lead Investor is.  How experienced are they?  How much did they invest under the same terms?  Wefunder is in the process of requiring that each company identifies the Lead who helped set the valuation.

  • Where can I get more advice on how to invest wisely?

    One of the best early-stage investing firms - measured by objective returns - is Y Combinator.  They were the first investors in Reddit, Dropbox, Airbnb, Stripe, and over 100 more startups now worth over $100 million.  

    Head over to Startup Investor School – an entire video series of investor tips created by YC. 

  • Does my investment qualify for QSBS tax exemption?

    In theory, you should be able to claim the Qualified Small Business Stock (QSBS) tax exemption on the investments made on Wefunder the same way you could for any early-stage business that meets the requirements of Section 1202 of the tax code.

    The QSBS tax exemption has a variety of requirements, including:

        - The company is a US C-Corp with less than $50M in gross assets at the time the stock is issued (including the money raised in the financing)

        - At least 80% of the company's assets must be used in operating a "qualified trade or business," which excludes: personal services; banking, insurance, financing, leasing, or investing; farming; mining; or operating a hotel, motel, or restaurant

        - The investor is not a corporation, acquires the stock at its original issuance (ie., not a secondary purchase), and holds the stock for at least 5 years

    Read more on QSBS requirements here

    We can’t guarantee that any investments made on Wefunder will qualify for QSBS. If you have questions on eligibility, we recommend speaking with your tax advisor. You can also ask founders whether they have looked into QSBS eligibility by leaving a comment on the company’s Ask a Question page.

Investment Contracts

  • What is a SAFE?

    A SAFE grants an investor the right to obtain equity at a future date if the startup sells shares in a future financing. It has been historically used by top startups in Silicon Valley raising money from accredited angel investors. You should only invest in a SAFE if you believe that the startup can raise financing in the future from professional investors.

    Early-stage startups use SAFEs to delay the difficult task of figuring out how much a startup is worth. It's also a much cheaper and simpler contract than priced equity rounds, which may require months of negotiation and upwards of 30 pages of legalese costing tens of thousands of dollars.

    The number of shares you receive is determined at the next priced financing when professional investors – typically venture capitalists – set the price for preferred stock. Then, calculated by using the Valuation Cap and sometimes the Discount Rate, your SAFE often converts into shares at a lower price than the venture capitalists paid, since you invested earlier.

    The Valuation Cap is the most important term in this security. It puts a maximum price on the price of the stock - the lower the price, the more shares you will get. If you invest in a startup with a valuation cap of $8 million, and they later raise at a $20 million Pre-Money Valuation, the amount of stock you'll get will be priced off the $8 million number. But, if the next investors value the company at $4 million, that will be your price instead (perhaps further discounted by the Discount Rate).

    Unlike a Convertible Note, a SAFE is not a loan. As such, it does not accrue interest, have a maturity date, or have a legal obligation to be paid back. This makes it a simpler and cheaper way to finance a startup, and it typically better aligns with the intention of most early stage equity investors who never intended to be lenders (convertible notes are rarely if ever paid back in cash despite being a debt instrument – the startup just goes bankrupt).

    Further Reading:

  • What is a Convertible Note?

    A convertible note is an unsecured loan that converts to stock at some point in the future. They are one the most popular forms of seed-stage startup investing because of their history, although the SAFE is rapidly becoming more prevalent.

    Convertible notes are also useful because they delay the difficult task of figuring out how much the startup is worth. The number of shares you receive is determined at the next qualified financing (typically $1 million), when venture capitalists set the price for preferred stock. Then, calculated by using the Valuation Cap, Discount Rate, and Interest Rate, your loan converts into shares at a lower price than the venture capitalists paid, since you invested earlier.

    If the startup does not raise another round of funding, the note becomes due at the maturity date, typically in 18-24 months. Convertible notes, however, are rarely repaid in cash. Instead, the note usually converts to equity at a pre-set target price.

    The discount and interest rates have a relatively minor impact on future returns. The most important term to focus on – which can greatly impact the price of your future shares – is the Valuation Cap. This is usually set between $3 to $20 million, depending on how "hot" the startup is.

    Learn more about convertible notes
    here.

  • How does Preferred Stock work?

    As a non-lead investor investing a small amount, the most important terms to pay attention to are the Post-Money Valuation or the Pre-Money Valuation. This is effectively what the company is considered to be worth, and with it, you can calculate your percentage ownership. Comparatively, the price of the stock is relatively meaningless.

    One of the most popular open-sourced priced round agreements is the Series Seed, developed by Fenwick lawyer Ted Wang.

    Read more about Series Seed.
    Learn more about terms.

  • How do revenue share or loans work?

    High-growth startups almost never raise seed-stage funding with loans, as debt doesn't offer enough of a return to account for the risk investors are taking.

    However, loans or promissory notes can be more appropriate for small businesses that are cash-generating. One benefit of investing with a loan is that the investor often receives cash every quarter or year, as the principal is repaid alongside the interest rate. The downside of debt is you have no equity stake if the company suddenly becomes much more valuable.

    A Wefunder Revenue Share Loan Agreement is a promissory note that is paid back from a share of the revenues of the business.  

    Important terms in this note include:

    • Gross or Net Revenues. Net revenues exclude returns or shipping costs.
    • Revenue Percentage. This is the percentage of revenue that is shared.
    • Repayment Amount. Typically 1.5-3.0X, this is the maximum amount you will be paid back.
    • Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
    • Defer Payments. By default, every company can miss one payment without being in default.
    • Secured. Some loans may be secured with all property of the business.

    Some businesses choose not to share their revenue, and instead offer something more like a car loan, using the Wefunder Promissory Note.  Important terms in this note include:

    • Interest Rate. The interest rate per annum.
    • Maturity Date. How many years until the loan is fully paid back?
    • Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
    • Grace Period. By default, these loans are deferred until 30 days after their crowdfunding deadline date. Some businesses may defer the start of their loan at a later date, such as when their business is scheduled to open.
    • Defer Payments. By default, every company can miss one payment without being in default. This is meant to allow businesses time to recover if they have a bad year.
    • Secured. Some loans may be secured with all property of the business.
    • Personal Guarantee. Some loans may have an individual that personally guarantees payment.
    • Subordination. Some loans are subordinate to a major bank lender.
  • Does Wefunder suggest the terms of fundraises?

    It is up to each company to set the terms of their fundraise. 

    Wefunder sometimes provides advice or guidance to companies on what the right terms might be. We base this advice on a number of factors, including the company's stage of development, metrics such as revenue and user growth, industry, market size, comparable companies, and the overall state of the market. Wefunder may also refuse to host a particular fundraise if we believe the terms offered are unreasonable.

Payment

  • What are my payment options?

    You can pay using a bank transfer (US only), check (for investments $1000+), credit card, or wire transfer (international investors only). If you choose to pay by credit card, there is a $10,000 limit.

    International investors can pay by wire transfer – we recommend TransferWise. You'll likely to have to fund your Wefunder Cash (wefunder.com/cash) account with a wire and then go make your commitment to a specific company.

  • Do my funds enter an escrow account?

    Yes. Your investment is placed in a third-party escrow account hosted at Boston Private Bank (recently acquired by Silicon Valley Bank). Funds are transferred to the business only after the fundraising goal has been met.

  • How long do I have to send a payment?

    You can send your payment in at any time during the fundraise, but you will want to make sure we have the payment by the time the fundraise closes or your investment application will be automatically canceled.

  • How do I check my payment status?

    You can head over to your portfolio page to see the status of your payment. The portfolio page will show you where you are in the process of successfully submitting your application to invest. If the investment says pending, this is not necessarily referring to a payment. This may just mean that we are waiting on the investment to finalize before it can be confirmed if you are accepted into the round. If you need to edit your investment, you will also be able to do this here if the fundraise is still open and not oversubscribed.

  • My payment failed. Help!

    When a payment fails, we send you an email. You can follow the instructions in the email to fix the failed payment. 

    If you didn't get the email, you can find which of your investments is awaiting payment on your portfolio page.

  • I'm an international investor and I need the IBAN number.

    We do not have an IBAN number. You should be able to send a BIC/SWIFT wire through your bank. We recommend using TransferWise.

    If this proves difficult, you may need to contact customer support at support@wefunder.com.

    Full international investor guide here.

  • What fees do investors pay?

    For payments made by bank ACH, wires, or checks, Wefunder charges investors a transaction fee of 2%, with a minimum of $8 and a max of $100. For credit cards, Wefunder charges a 3.5% fee, with a minimum of $8 and no maximum.

    Investors can get their first investment fee free by completing the welcome sequence when creating their account (www.wefunder.com/welcome) and using their ACH bank account (US banks only) or a wire. Please note, this only applies to first investments.

    Fees are one time and are not reoccurring.

  • Why is my investment still pending?

    Your investment may still be pending because we are still processing your payment, you have action items to complete, or we are waiting for the fundraise to finalize.

    If your payment is still processing, here are our typical processing times.

    - Bank Transfers (ACH): It takes approximately 5-7 business days to confirm that funds are deposited.
    - Checks: Once the check is deposited into our third-party escrow account, they will send us the payment information and we will credit your account. Checks typically take 7-10 business days for us to receive and reconcile them.
    - Wire Transfers: 
    Once the wire is deposited into our third-party escrow account, they will send us the payment information and we will credit your account. Wires typically take 7-10 business days for us to receive and reconcile them due to the fact that there are several intermediary banks that they typically have to go through, and then occasionally a delay when it hits our escrow account and notifies our system.
    - If you are in a pinch for time, credit cards settle instantly. We highly recommend this if a fundraise is close to closing.

    To avoid any potential delays, be sure to include your unique investment ID on your wire or check.

    If you're paying by wire or check, you will need to provide additional information about the payment to help us reconcile it. To do so, after you've sent out the wire / check, log into Wefunder and go to your portfolio page and enter the information where is asks you to "provide payment info." 

    If your investment application has action items, you'll need to complete those in order for the application to be submitted successfully. You may need to provide your SSN (required for all investments), verify your identity (once your collective investments are more than $2,200), or verify accreditation status if you indicated you are an accredited investor or are making an investment over $25,000.

    If all of those are complete and your investment looks like it was submitted successfully, then we are just waiting for the fundraise to finalize. You will typically see a date for when this will happen on the timeline located in your portfolio page. Please note that this date is just an estimate and times may vary.

  • Why do you need my SSN?

    When making an investment on Wefunder, you need to provide a tax ID in order to invest. Tax ID generally means an SSN for an individual and an EIN for a company. We require these because when the company you invest in makes a distribution to investors (for example, if they get acquired) we’ll need to provide tax documents to you such as a Form K-1, which require us to include your SSN. If we don't receive your SSN, your investment will be canceled.

    We know you might be hesitant to provide this information, but we guard your SSN like our life depends on it. 

    We encrypt and store Social Security Numbers (SSNs) on a separate group of servers from wefunder.com. We use an RSA key to encrypt the SSN and isolate the private key from production machines. Access to the database that stores the encrypted SSNs is restricted within Wefunder to a need-to-know basis, and we have a policy for access if and when an employee may need to view an individuals SSNs (for example, if we're preparing a tax filing or investigating fraud).

  • I've been waitlisted. What does that mean?

    Some investors are waitlisted when a large number of people apply to invest and the company receives more money than they can legally accept. 

    It is quite common for a campaign to have a rush of investors as it gets closer to reaching its desired amount, which can create some misunderstandings on exactly "when" it becomes oversubscribed. 

    We will not be able to fully confirm investments until after the campaign ends and our Wefunder Closing Team works with them to get everything in order. Our automatic emails regarding the company will all mention the waitlist, including if you invested before it was oversubscribed and it just took a bit to process. You could be successfully in Reg CF, but still receive a waitlist email.

  • Why is my investment still in escrow?

    In order to execute your investment, there are a bunch of SEC guidelines and regulations we have to abide by.  Sometimes, it can take several months for us to finalize a fundraise after it closes. Once your funds have been sent to the company and your contract is countersigned, your investment will be marked as confirmed.

  • Why is my total investment less than I committed?

    We do not issue fractional shares, so we round down your commitment.

    For instance, if the share price of a company is $20, and you commit $250, we'll lower your commitment to $240 in order to purchase 12 shares.

    However, you will still be eligible for any perks you were expecting at that requested $250 level - each company fundraising will manage disbursement of perks after all contracts have been finalized. 

  • What is Wefunder Cash?

    Your Wefunder Cash account is a virtual wallet. Literally, the money is held by our third-party banking partner, Boston Private Bank (recently acquired by Silicon Valley Bank).

    Transferring funds to you Cash account right after making a reservation helps you to invest faster – you can apply funds from there once you confirm an investment.

    Any funds you transfer into your Cash account can be withdrawn anytime or used to fund a company. 

    More on Wefunder Cash & reservations here.


  • What does it mean to "reserve" an investment?

    When you make a reservation to invest, that company is currently in what we call the "Testing The Waters (TTW)" phase of their fundraise. This means they are taking pledges to gauge if they would have a successful raise. It is important to understand that reservations are non-binding and they do not guarantee anything such as getting in the fundraise, early bird terms, etc.

    For a TTW fundraise, the invest page will initiate a Wefunder Cash transfer, drawing funds from an investor's saved bank or wire account or do a pre-authorization of your credit card. When the fundraise goes live, you will be asked to confirm the reservation and payment will be applied at that time.

    Full scoop on reservations & Wefunder Cash here.


Refunds

  • Can I cancel my investment and get a refund?

    Yes. You can change your mind anytime up until a fundraise closes and you will receive a full refund, including any fees. Unfortunately, investments cannot be cancelled once the fundraise closes.

    You'll receive a five-day notice via e-mail when a fundraise is about to close. Additionally, we put a 7 day warning on the fundraise page to let investors know that it will be closing soon. You can cancel at any point up until the fundraise closes.

    Once the minimum funding target is met, many companies do a "rolling close", where investments that have successfully applied to invest are executed and funds are transferred, but the round is still open to receive new investments. You'll still receive a five-day notice if this occurs.  Once your funds are transferred to the company, you no longer can cancel your investment or obtain a refund. 

  • How will I receive a refund?

    When you cancel your investment or a campaign fails, a refund, including fees, will automatically be sent back to the bank account or credit card that was used to make the investment. 

    If you sent a check or a wire, your money will be refunded to your Wefunder Cash account. From there, you can refund the money to your bank account (US banks only) or wire the money to your bank (international investors only.) We cannot refund any check payment via check as stated when you chose this option to pay. These refunds must be completed by bank transfer or wire transfer. 

    We can also refund investments in Wefunder credit, which can be used toward future investments and fees!

  • How long will it take to receive my refund?

    We initiate refunds as we receive them, but it can take a few weeks to reach you, especially if you invested with a check or wire or from abroad. Our typical refund timeframes are as follows:

    - ACH Bank (US) - Within 3-5 Business Days
    - Credit Card - Within 3 Business Days
    - Wire (US) - Within 7-10 Business Days
    - Wire (International) - Within 10-14 Business Days
    - Wefunder Credits - Same Day

  • What are the limits on canceling an investment?

    Once the fundraise has a close date you'll receive a 5-day notice. In addition, you will see a 7-day countdown on the fundraise page. You have up until the fundraise closes to cancel.

    Once the minimum funding target is met, some companies do a "rolling close", where investments that have successfully applied are executed and funds transferred, but the campaign is still open to receive new investments. 

    You'll still receive a five-day notice when any close is about to happen.

  • Can the company not accept my investment?

    Yes.  Companies may choose not to accept your investment for any reason. One reason may be that they discovered you worked for a major competitor.

    After the round closes, and the company has countersigned the contract and received the funds, your investment can no longer be cancelled.

  • When will the fundraising round close?

    The fundraise round will close for certain at the company's offering deadline. 

    However, almost always, a successful fundraise closes earlier (although it must be open for at least 21 days).  Additionally, some companies may do a "rolling close" after 21 days have passed and their minimum fundraising target is reached.

    When a round closes earlier, you will receive a five-day notice before the closing date via email and a 7-day countdown will be on the visible on the fundraise page.  

  • What happens if the fundraise fails?

    You'll be notified via email and will receive a full refund of your investment, along with any fees you've paid.

  • How long will it take to receive my Wefunder Cash refund?

    You can expect your Wefunder Cash refund within 5-7 business days. We do our best to process these requests quickly, but any delays are typically due to fraud checks that we have in place to ensure that our investors and their money are safe.

Legal

  • Which offerings am I legally allowed to invest in?

    It depends on whether you’re an accredited or non-accredited investor. If you’re accredited, you can participate in all security offers. If you are non-accredited, you can invest in Reg A+ and Reg CF offers.

  • What’s an accredited investor?

    Accredited investors are wealthy people: typically, they make over $200,000 per year ($300,000 if joint with spouse) or have over $1M in assets, minus their primary residence.

    To find out your investment limits, open an investor account.

  • How do I verify my accredited status?

    If you meet the qualifications for accreditation and would like to verify your status, you'll need to submit documentation that confirms your income or net worth. You can do this in your settings (www.wefunder.com/settings).

    Here's what we'll accept:

    - A letter from a lawyer, accountant, deal-broker, or investment advisor indicating that they have seen your financials and can confirm that you meet the accreditation requirements.
    - Tax forms like W-2s, 1099s, K-1s, etc.
    - Certificates of deposit , tax assessment, or appraisals.
    - If you're investing from outside the US foreign, convert your country's currency into USD to determine if you meet the threshold.

  • How much am I allowed to invest?

    It's complicated.  Thankfully, when you sign up for a Wefunder account, we'll do all these calculations for you.


    The amount you are legally allowed to invest depends on which Regulation the company uses to fundraise.

    For Regulation Crowdfunding offerings, Wefunder calculates your annual investment limit based on the net worth and income provided upon account opening. Investment limits are for every 12 month period. Every investment in a Regulation Crowdfunding offering counts towards the annual limit. We will not let you invest more than this amount. The SEC made it pretty complicated to calculate this number, but if you're curious:

    - Everyone can invest at least $2,200
    - If either your net worth or income is below $107k, you may legally invest a maximum of 5% of the greater number.
    - If both your net worth and income are above $107k, you may legally invest a maximum of 10% of the greater number, up to a max of $107k.
    - Accredited investors will be able to invest as much as they'd like in Reg CF offerings.

    For Regulation A+ offerings, unaccredited investors can invest up to 10% of income or net worth per year, whichever is greater.

    For Regulation D offerings, only accredited investors may invest, and they have no limits.

    Please note: For any investment higher than $25k, we require proof of accreditation regardless.

  • Can I invest if I don't live in the United States?

    We have investors from all around the world! With a few exceptions, we accept investments from international investors, as long as you represent that you are complying with the law in your country. Here's a step-by-step guide on investing from outside the US.

    The only exceptions are the Provinces of Quebec, Ontario and Alberta which have requested that we bar their residents from investing on our platform.

  • Can I add a spouse or beneficiary to my investment?

    Unfortunately, we do not offer joint investments. Each contract must be between the individual investor and the founder of the company receiving the investment. There should only be one person per account.

  • A company is citing one of the “SEC’s Temporary Amendments” in their financial disclosures section... What the heck does this mean?

    Due to the impact of COVID on small business, the SEC issued a temporary relief order with a few amendments meant to ease the process for companies looking to raise. You can read the full order here, if you're curious. Some of these amendments center on how a company must go about disclosing its finances. 


    Here were the pre-existing guidelines:

    - A company intending to raise up to $107k had to produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer.
    - A company intending to raise more than $107k had to produce CPA-reviewed statements.

    Here's what the temporary relief order changes (note that these changes only apply if a company has been incorporated for at least 6 months): 

    - A company intending to raise up to $250k can produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer. 
    - A company 
    intending to raise more than $250k must produce CPA-reviewed statements.
    - A company
    can file a Form C (read: launch a campaign) without any financial statements, provided they’re added in prior to the company accepting investments. Basically, this means that every company must disclose financials to actually accept any money from investors but some companies are exempt from including their financial info when initially filing their offering.

  • A (super) quick guide to investing via an entity.

    To make an investment via an entity, you don't need to create a new Wefunder account! As you're making the investment through your account, you will change the "Investor Info" from investing as yourself to your entity using the dropdown menu (you may need to click edit on box 2 to get this option). If you don't have an entity listed in your account, you can click the option that says "+ Add New Entity". Based on how you want to invest, you can toggle this on and off as you make each investment on Wefunder.

    Please note that your account legal name should be YOUR name as the manager of the entity. You are allowed to put your entity name as your public name if you wish to do so.

  • How do oversubscriptions work?

    When a company gets more investment commitments than they're allowed to close on, their campaign is "oversubscribed". Under Regulation Crowdfunding, a company can legally raise a maximum of $5M in a 12-month period. Companies may also set a lower funding goal to avoid some extra legal work.

    When a round is oversubscribed, we open a parallel round under Regulation D (Rule 506(c)) to accommodate more investments. Only accredited investors qualify, and funds closed in the Reg D don't count towards the limits under Reg Crowdfunding. Investors in the Reg D receive the exact same price, terms, and contract, plus we waive our fees on those investments. Investors will receive an email notifying them if their investment is moved under Regulation D. 


Troubleshooting

  • How do I complete my investor account?

    Fill in all the information on your investor profile

  • How do I change my password?

    To change your password, go to wefunder.com/settings. Find Password and choose Reset to create a new password.


  • I forgot my password.

    No worries! If you forgot your password, go to wefunder.com/login and click Forgot Password. Enter your email address and we'll send you a link to reset your password. 


  • I need to change the name on my investment.

    If your investment has not been confirmed, you can reach out to our Investor Success Team for help (support@wefunder.com).  If the investment is already closed, you will need to contact the company you have a contract with to make this change. Once the company has approved the change, then we will be able to update our copy of the contract on our end.

  • How are contracts signed?

    Everything is handled electronically. You sign a contract when you apply to invest. The founder will sign the contract after the fundraise closes and finalizes the raise. Once the founder countersigns, you'll be to find the contract in your portfolio.

  • I get too many emails. Can I unsubscribe?

    To unsubscribe from Wefunder emails, go to your email settings. You can subscribe to certain categories of emails and only receive emails that are relevant to you. Such categories include the following:

    You will still receive emails from Wefunder relating to transactions and account activity.  In addition, you will still receive updated from companies you have invested in and that are on your watchlist. If you wish to no longer receive those, you can change the last setting to "never".

  • How can I ask the founders questions?

    For any company currently fundraising, you can ask the founders questions directly on the fundraise page by clicking the "Ask a Question" tab. Founders monitor this forum and answer as they are able.


  • When will I receive my perks?

    The founder(s) of the company you invested in should reach out shortly after the fundraise has ended and finalized with information on how to claim any perk(s) you may have. If you do not hear from them, you will need to contact the company as they are the ones that take care of perks. Please note: Wefunder does not monitor or facilitate the perks that a company offers during their raise.


  • Can I make an investment as a gift?

    Investing in startups on Wefunder is a bit different than the stock market - contracts are not easily transferrable and the person who will own the security needs to also be the person who consents to invest. 

    That said, there are plenty of companies on Wefunder that sell cool stuff that make awesome gifts! Feel free to browse through our Explore page.

Getting Started

  • What is Wefunder?

    We help everyone invest as little as $100 in the startups they love.  

    You can think of us like “Kickstarter for investing”. 

    Unlike Kickstarter, you are not buying a product or donating to an artist. Instead, you are investing in a business with the hope of earning a return on your investment. 

    You decide which companies are worthy of funding. If the business does well, you may make money.  If it doesn’t do well, you lose all your money. 

    Either way, you join a community of other investors who seek to help the startup succeed. You sometimes get neat perks from the companies too.

  • How is Wefunder different from the stock market?

    Startups on Wefunder are much earlier-stage than companies listed on the NASDAQ or the New York Stock Exchange. Here are a few big differences:

  • Wait… how is this legal?

    Starting in May of 2016, thanks to a new law called Regulation Crowdfunding, it became legal for everyone to invest small amounts of money in the startups they believed in. 

    From 1933 to 2016, it was illegal to make an investment in a private company unless you were an “accredited investor” (i.e., rich).

    We started Wefunder to fix that, because we weren’t rich, and we wanted to invest in our friends. The first thing we had to do was convince Congress to change the law. We managed to do that, and here we are today!

  • Why should I invest in startups?

    It shouldn't be to make lots of money! This isn't the stock market. Startups are much riskier and more likely to fail.  Greed is a bad reason to invest.

    Of course, if you invest wisely, you can make money.  Our advice?  Invest only in what you understand (and preferably love). If you are a customer and love the product, then it’s more likely it’s a good investment. If you don’t understand it, it may be a bad idea to invest. 

    Our opinion is that investing should not be solely about earning a return. To invest in something as risky as a startup, you should feel something extra, beyond just the business model.  For us, that “something extra” is the fulfillment we feel helping a founder take "their shot" at making our world a slightly better place. We also think it’s pretty cool to learn about different industries when we get updates from the founder.

  • Any tips for a first-time investor on Wefunder?

    Our advice?  Start off slow.

    1. Expect to lose it all. Never invest more than you can afford to lose.

    2. Only invest in what you understand. Preferably, a product or mission that you love.

    3. Do your research. You also can ask the founders a question on their company profile.

    4. Diversify. It’s better to make multiple small investments rather than one large one. Plus, it’ll help you learn more.

    5. Look at the Lead Investor.  Has a more experienced investor invested in the company, under the same terms as you?  Why are they investing?

    For more tips, head over to Startup Investor School – an entire video series of tips from the world's best startup investor, Y Combinator.

    Note that these are tips, not investment *recommendations,* and you should make your own decisions when deciding what to invest in.

  • What kind of companies are on Wefunder?

    As we like to say, nearly the entire American economy! That’s the fun part! We’ve funded tens of millions of dollars in startups like:

    • Moonshots like flying cars, space telescopes, and fusion reactors
    • Neighborhood businesses like café’s, restaurants, and breweries
    • Software like mobile apps and online education
    • Biotechnology like glowing plants and researching cancer cures
    • Entertainment like Hollywood studios and immersive theater
    • And much, more!

    The one commonality? All of the companies that raise successfully on Wefunder have a loyal community of people who believe in them. 

  • After I invest, how often should I expect updates?

    Wefunder recommends that founders update to their investor at least once per quarter, but you can also ask the founders for an update in the Q&A section of their fundraise page.

    Most companies are also legally required to issue an Annual Report 120 days after the end of their fiscal year. The annual report is a more comprehensive update with their latest financials, board members, new financings, and more. In some instances, they may no longer be required to file this information, though we encourage them to do so anyways. Most companies have their fiscal year end on December 31st, and their annual reports come out by April 30th

  • Is Wefunder regulated?

    Yes!  The SEC and FINRA wrote around 1,000 pages of regulations that we work diligently to comply with.

  • Where does my money go after I invest?

    Wefunder is prohibited by law from touching your money.

    When you invest, your funds are transferred to an escrow account, in custody of Boston Private Bank.  If the fundraise succeeds, your money will be released to the startup. Otherwise, it will be refunded to you. 

  • Do you recommend good investments?

    No!  It’s illegal for us to endorse or recommend any company. 

    But even if it wasn’t illegal, we don’t want Wefunder to be a “gatekeeper” that picks and chooses which ideas are worthy of funding. That’s for you to decide.

    No company on Wefunder – no matter where it appears on our web site – is endorsed by us.  Also, while we may sometimes help companies “make their profiles look pretty,” all of this information is provided and fact-checked as true by the companies, not us.     

    While we don’t vet ideas, we do our best to screen for fraud, such as researching the founders and verifying that the documents they’ve provided comply with the law. 

  • Why did you create Wefunder?

    Initially, we created it for ourselves. We wanted to invest in our friends.  We also wanted to support causes we cared about with our dollars, like revitalizing American manufacturing or researching cancer. We see every startup as a social movement to change the world in one specific way. We wanted to join more of those movements, and help where we could. 

    That’s also why we became a Public Benefit Corporation.  We aim to make capitalism work better, by sprinkling the Silicon Valley fairy dust across the rest of America. We want to help thousands more potential founders get off the ground and take their shot. 

    Join us!

Risks

  • Just how risky are startups?

    Very! You should only invest what you can afford to lose. Do not invest so much that it would impact your lifestyle or retirement plans. Every investment listed on Wefunder is much riskier than a public company listed on the stock market. It is entirely possible that you will lose every dollar you invest on Wefunder.

  • How can I decrease the risk?

    You are more likely to avoid loss by diversifying your investments, focusing on areas in which you have expertise, and investing in startups whose products you passionately use. Even professional investors have a difficult time predicting exactly how startups will earn money in the future (e.g., Google in 1999). Investing in what you know and find personally valuable is an important signal of a good investment.

  • How many investments should I make?

    We recommend making several small investments each year rather than one large one. For instance, if you decide you can safely invest $5,000 per year in startups, it'll be less risky to make ten $500 investments instead of a single $5,000 one. You should never invest more than you can afford to lose.

  • Is an equity investment appropriate for me?

    If you can't afford to lose every dollar you invest on Wefunder, the answer is no. If you can't afford to wait 7+ years for a return, the answer is also no.

    You might have a strong belief in the future success of a company, but it's safer to think of an equity investment as a lottery ticket that might pay off in the very long term.

    Unlike the stock market, investment outcomes are much more binary (complete failure or wild success), and there's no stock market that'll allow you to easily re-sell your investment stake to someone else unless the company is acquired or prepares for an IPO.

  • Is a debt investment appropriate for me?

    Compared to equity investments, loans can be slightly less risky, but also have a smaller upside. You should still assume that even a loan will not be paid back. Never invest more than you can afford to lose.

  • Can I easily resell my investment?

    It's safest to assume you cannot resell your investment to another investor. First, there is not yet a liquid secondary market like the New York Stock Exchange for private companies (yet). Regulation Crowdfunding also specifically prohibits the resale of securities for one year, except to the issuer, an accredited investor, a family member, or their trust.

  • Will my percentage ownership be diluted?

    Yes. An equity stake will almost certainly be diluted.

    Successful startups host many rounds of financings, all the way to an IPO. For each financing, the startup issues additional stock to the new investors. As long as the value of the company increases with each funding round, this is healthy and normal. For example, the first investor in Facebook, Peter Thiel, originally purchased ~10% of the company for $500,000. By 2011, that stake was diluted down to under 3%, but estimated to be worth ~$2 billion.

    Sometimes, when things are not going well, the startup is given the option of going bankrupt or raising more money in a "down round," which means the value of the company decreased since the last financing. This is very bad for the founders and past investors alike; the dilution happens much more rapidly. But it's preferable to the startup going bankrupt and the investors losing everything.

  • Will the startup use Wefunder in the future?

    Wefunder provides startups free continued access to our platform, but there is no guarantee they will continue using our services.

Lead Investors

  • What is a Lead Investor?

    The Lead Investor is an investor who is familiar with the startup and decided to invest on the same terms as those offered on Wefunder.  More importantly, the Lead Investor directs the voting power of all Wefunder investors. 

    When deciding whether to invest in a company, you should look at who the Lead Investor is, see how much they invested and why, and make your own decision on if you trust their judgement. 

    Note that Wefunder does not endorse the views or activities of any Lead Investor and our approval of a Lead Investor does not constitute an investment recommendation.

  • What does a Lead Investor do?

    The Lead Investor:

    1. Decides if they want to invest on the same terms as those offered on Wefunder.

    2. Directs the signing of documents on behalf of all investors on Wefunder, such as SAFEs converting to equity, follow-on financing authorizations, acquisitions, or any other corporate action. These are the same documents a Lead signs for their personal investment.

    Note that Wefunder does not endorse the views or activities of any Lead Investor and our approval of a Lead Investor does not constitute an investment recommendation.

  • Do I have voting rights?

    All securities sold on Wefunder with a Lead Investor have voting rights unless explicitly stated otherwise. However, these voting rights are directed by the Lead Investor.  

  • Can we fire a Lead Investor?

    Yes. If there is evidence of behavior that is against the best interests of the company or a serious conflict of interest, Wefunder can intervene in extraordinary circumstances. 

    Depending on the circumstances, Wefunder can remove the Lead Investor, organize a vote of all Wefunder investors on whether to remove the Lead Investor, and/or organize a vote of all Wefunder investors on a particular voting decision for which the Lead Investor has a conflict of interest.  

  • Will the Lead Investor be paid?

    No, they won't be compensated for their role as a Lead Investor. But, they may be appointed as portfolio manager to an SPV formed by Wefunder in a future Reg D round, for which they could receive carried interest.

SPVs & Custodians

  • How do SPVs work?

    To ease logistical burden for founders and solve problems with having too many stockholders on the cap table, we are now using special-purpose vehicle (SPVs) for most new fundraises. This means we'll set up an LLC that exists for the sole purpose of investing in each startup. All investors pool their capital into the SPV, which then invests in the company as 1 entity. If there are early bird terms, a separate SPV will be set up to hold the early bird investors. 

    We'll set up these SPVs at no extra charge to companies or investors.

  • Why do startups use SPVs?

    Startups use SPVs to ensure their future growth and follow-on financings won’t be at risk. Having too many individual stockholders can make venture capitalists skeptical, require companies to go public before they're ready, and make gathering stockholder approvals a challenge. 

    With an SPV, founders can have an unlimited number of smaller investors grouped into one large entity, with voting power directed by a Lead Investor.

    For more info on how SPVs solve some tricky legal issues in structuring investments, see here.

  • Who manages the SPV?

    For most new SPVs, the manager is Wefunder Admin, LLC, who then delegates voting decisions to the Lead Investor.

    For legacy Reg D SPVs and those set up for certain purposes such as investing in follow-on financings, the manager is Wefunder Advisors, LLC.

    The manager of the relevant SPV is indicated in the Subscription Agreement that investors sign when they invest through an SPV.

  • Will I be investing via the custodian or SPV?

    It depends on the offering. If the company is using the custodian or SPVs, that will be clearly indicated in the legal disclosures in their Form C. 

    As of March 15th 2021, we have seen many companies use SPVs, although some companies still choose to use the custodian. 

    Most raises that launched between May 2020 and March 15th, 2021 used the custodian. 

  • What is a Custodian?

    A Custodian is an entity (such as a broker-dealer, bank, or transfer agent) that holds any securities on behalf of all investors (who are the "beneficial owners" of the securities).  

    This means investors do not actually possess the shares, convertible notes, or SAFEs. Instead, the Custodian holds them on their behalf. All voting rights of securities are delegated to the Lead Investor, who directs the Custodian on how it should vote the investor securities. This makes the Custodian the only entity listed on the cap table, because it is the record holder of all the securities. 

    On Wefunder, XX Investments LLC - an SEC-registered transfer agent - acts as Custodian for all securities sold on the platform that use the Custodian structure.


  • Why are my securities held by the XX Custodian?

    Using a Custodian increases the quality of startups that use Wefunder while also giving more voting power to investors on Wefunder. 

    • Access to higher-quality investments.  With a Custodian, higher-quality startups with other fundraising options are more willing to use Wefunder. Startups use a Custodian to ensure their follow-on financing won't be at risk. Venture capitalists are uncomfortable when startups have many small investors directly on the cap table  (they don't like collecting thousands of signatures). With a Custodian, all those smaller investors are represented by one entity on the cap table: XX Investments LLC. 

    • Concentrate investor voting power into one Lead Investor.  Before Custodians, almost no companies that crowdfunded offered voting rights to their investors.  Now, all voting rights are held by the Custodian, which must vote as directed by the Lead Investor. The Lead Investor is financially incentivized to fight for the rights of all investors on Wefunder.  

Earning a Return

  • How do I earn a return?

    The amount you may earn depends on the type of investment contract the company is offering.

    There are four classes on Wefunder:

    • Debt.  Some local businesses offer a simple loan or revenue share.  A simple loan, just like your car loan, has a fixed repayment schedule known in advance.  Unlike a loan, a revenue share returns a fixed amount of money (such as 2X your investment), but the time it takes to repay depends on how well the business does.  The faster the business grows revenue, the faster you earn a return, and the higher your effective interest rate.  

    • Convertibles. Most early-stage technology startups use a Convertible Note or Simple Agreement for Future Equity. These will convert your investment to stock at a later date if the company raises a "priced round" from major investors, most often venture capitalists. At this point, you are a shareholder owning equity, and you earn a return if the value of that stock goes up over time, and you are able to sell it.

    • Stock, No Dividends. When a startup is at a stage where they can afford to pay lawyers tens of thousands of dollars, they will do a "priced round". Like the stock market, you are buying equity at a fixed price per share (or unit for LLCs). If the company is successful, the value of the stock can increase with each subsequent round of financing, until the company is acquired or goes public. Then you earn a return.

    • Stock, Dividends.  While a tech startup almost never offers dividends, a later-stage local business - such as a brewery opening a second location - often will.  The type of dividend can vary.  Some might offer a fixed dividend per share per year. Some might offer a percentage of profits.  A common scenario is also to "swap" the dividend after your investment is repaid.  For instance, a brewery might share 80% of its profits until the investors are repaid, and then 20% thereafter in perpetuity.
  • How long until I see a return?

    The amount of time it takes to see a return is highly dependent on the type of investment contract.

    • Debt. A simple loan will define the number of months until it is paid back. For a revenue share, it depends on their projections for future revenue. The faster the business makes money, the faster you will see a return.

    • Convertibles & Stock with No Dividends. You are waiting until the company goes public or is acquired. This can take a very long time. It took the early investors in Harmonix (the creators of Guitar Hero) over 10 years to earn a return.

    • Stock with Dividends.  This depends on the specific investment agreement. Typically, dividends are a percentage of profits. Therefore, the amount of time to see a return depends on how profitable the business is.
  • How is the valuation determined?

    Market demand determines the valuation. Valuation shifts with time, depending on the amount of capital chasing startups. Right now, early-stage high-growth startups are often valued at $3 to $20 million for their first financing. Lifestyle businesses are valued at less. Companies that have raised several rounds of financing and are further along are worth far more.

    In order to get a sense if a valuation seems reasonable, look at who the Lead Investor is.  How experienced are they?  How much did they invest under the same terms?  Wefunder is in the process of requiring that each company identifies the Lead who helped set the valuation.

  • Where can I get more advice on how to invest wisely?

    One of the best early-stage investing firms - measured by objective returns - is Y Combinator.  They were the first investors in Reddit, Dropbox, Airbnb, Stripe, and over 100 more startups now worth over $100 million.  

    Head over to Startup Investor School – an entire video series of investor tips created by YC. 

  • Does my investment qualify for QSBS tax exemption?

    In theory, you should be able to claim the Qualified Small Business Stock (QSBS) tax exemption on the investments made on Wefunder the same way you could for any early-stage business that meets the requirements of Section 1202 of the tax code.

    The QSBS tax exemption has a variety of requirements, including:

        - The company is a US C-Corp with less than $50M in gross assets at the time the stock is issued (including the money raised in the financing)

        - At least 80% of the company's assets must be used in operating a "qualified trade or business," which excludes: personal services; banking, insurance, financing, leasing, or investing; farming; mining; or operating a hotel, motel, or restaurant

        - The investor is not a corporation, acquires the stock at its original issuance (ie., not a secondary purchase), and holds the stock for at least 5 years

    Read more on QSBS requirements here

    We can’t guarantee that any investments made on Wefunder will qualify for QSBS. If you have questions on eligibility, we recommend speaking with your tax advisor. You can also ask founders whether they have looked into QSBS eligibility by leaving a comment on the company’s Ask a Question page.

Investment Contracts

  • What is a SAFE?

    A SAFE grants an investor the right to obtain equity at a future date if the startup sells shares in a future financing. It has been historically used by top startups in Silicon Valley raising money from accredited angel investors. You should only invest in a SAFE if you believe that the startup can raise financing in the future from professional investors.

    Early-stage startups use SAFEs to delay the difficult task of figuring out how much a startup is worth. It's also a much cheaper and simpler contract than priced equity rounds, which may require months of negotiation and upwards of 30 pages of legalese costing tens of thousands of dollars.

    The number of shares you receive is determined at the next priced financing when professional investors – typically venture capitalists – set the price for preferred stock. Then, calculated by using the Valuation Cap and sometimes the Discount Rate, your SAFE often converts into shares at a lower price than the venture capitalists paid, since you invested earlier.

    The Valuation Cap is the most important term in this security. It puts a maximum price on the price of the stock - the lower the price, the more shares you will get. If you invest in a startup with a valuation cap of $8 million, and they later raise at a $20 million Pre-Money Valuation, the amount of stock you'll get will be priced off the $8 million number. But, if the next investors value the company at $4 million, that will be your price instead (perhaps further discounted by the Discount Rate).

    Unlike a Convertible Note, a SAFE is not a loan. As such, it does not accrue interest, have a maturity date, or have a legal obligation to be paid back. This makes it a simpler and cheaper way to finance a startup, and it typically better aligns with the intention of most early stage equity investors who never intended to be lenders (convertible notes are rarely if ever paid back in cash despite being a debt instrument – the startup just goes bankrupt).

    Further Reading:

  • What is a Convertible Note?

    A convertible note is an unsecured loan that converts to stock at some point in the future. They are one the most popular forms of seed-stage startup investing because of their history, although the SAFE is rapidly becoming more prevalent.

    Convertible notes are also useful because they delay the difficult task of figuring out how much the startup is worth. The number of shares you receive is determined at the next qualified financing (typically $1 million), when venture capitalists set the price for preferred stock. Then, calculated by using the Valuation Cap, Discount Rate, and Interest Rate, your loan converts into shares at a lower price than the venture capitalists paid, since you invested earlier.

    If the startup does not raise another round of funding, the note becomes due at the maturity date, typically in 18-24 months. Convertible notes, however, are rarely repaid in cash. Instead, the note usually converts to equity at a pre-set target price.

    The discount and interest rates have a relatively minor impact on future returns. The most important term to focus on – which can greatly impact the price of your future shares – is the Valuation Cap. This is usually set between $3 to $20 million, depending on how "hot" the startup is.

    Learn more about convertible notes
    here.

  • How does Preferred Stock work?

    As a non-lead investor investing a small amount, the most important terms to pay attention to are the Post-Money Valuation or the Pre-Money Valuation. This is effectively what the company is considered to be worth, and with it, you can calculate your percentage ownership. Comparatively, the price of the stock is relatively meaningless.

    One of the most popular open-sourced priced round agreements is the Series Seed, developed by Fenwick lawyer Ted Wang.

    Read more about Series Seed.
    Learn more about terms.

  • How do revenue share or loans work?

    High-growth startups almost never raise seed-stage funding with loans, as debt doesn't offer enough of a return to account for the risk investors are taking.

    However, loans or promissory notes can be more appropriate for small businesses that are cash-generating. One benefit of investing with a loan is that the investor often receives cash every quarter or year, as the principal is repaid alongside the interest rate. The downside of debt is you have no equity stake if the company suddenly becomes much more valuable.

    A Wefunder Revenue Share Loan Agreement is a promissory note that is paid back from a share of the revenues of the business.  

    Important terms in this note include:

    • Gross or Net Revenues. Net revenues exclude returns or shipping costs.
    • Revenue Percentage. This is the percentage of revenue that is shared.
    • Repayment Amount. Typically 1.5-3.0X, this is the maximum amount you will be paid back.
    • Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
    • Defer Payments. By default, every company can miss one payment without being in default.
    • Secured. Some loans may be secured with all property of the business.

    Some businesses choose not to share their revenue, and instead offer something more like a car loan, using the Wefunder Promissory Note.  Important terms in this note include:

    • Interest Rate. The interest rate per annum.
    • Maturity Date. How many years until the loan is fully paid back?
    • Quarterly or Annual Disbursement. Companies choose to make annual or quarterly payments.
    • Grace Period. By default, these loans are deferred until 30 days after their crowdfunding deadline date. Some businesses may defer the start of their loan at a later date, such as when their business is scheduled to open.
    • Defer Payments. By default, every company can miss one payment without being in default. This is meant to allow businesses time to recover if they have a bad year.
    • Secured. Some loans may be secured with all property of the business.
    • Personal Guarantee. Some loans may have an individual that personally guarantees payment.
    • Subordination. Some loans are subordinate to a major bank lender.
  • Does Wefunder suggest the terms of fundraises?

    It is up to each company to set the terms of their fundraise. 

    Wefunder sometimes provides advice or guidance to companies on what the right terms might be. We base this advice on a number of factors, including the company's stage of development, metrics such as revenue and user growth, industry, market size, comparable companies, and the overall state of the market. Wefunder may also refuse to host a particular fundraise if we believe the terms offered are unreasonable.

Payment

  • What are my payment options?

    You can pay using a bank transfer (US only), check (for investments $1000+), credit card, or wire transfer (international investors only). If you choose to pay by credit card, there is a $10,000 limit.

    International investors can pay by wire transfer – we recommend TransferWise. You'll likely to have to fund your Wefunder Cash (wefunder.com/cash) account with a wire and then go make your commitment to a specific company.

  • Do my funds enter an escrow account?

    Yes. Your investment is placed in a third-party escrow account hosted at Boston Private Bank (recently acquired by Silicon Valley Bank). Funds are transferred to the business only after the fundraising goal has been met.

  • How long do I have to send a payment?

    You can send your payment in at any time during the fundraise, but you will want to make sure we have the payment by the time the fundraise closes or your investment application will be automatically canceled.

  • How do I check my payment status?

    You can head over to your portfolio page to see the status of your payment. The portfolio page will show you where you are in the process of successfully submitting your application to invest. If the investment says pending, this is not necessarily referring to a payment. This may just mean that we are waiting on the investment to finalize before it can be confirmed if you are accepted into the round. If you need to edit your investment, you will also be able to do this here if the fundraise is still open and not oversubscribed.

  • My payment failed. Help!

    When a payment fails, we send you an email. You can follow the instructions in the email to fix the failed payment. 

    If you didn't get the email, you can find which of your investments is awaiting payment on your portfolio page.

  • I'm an international investor and I need the IBAN number.

    We do not have an IBAN number. You should be able to send a BIC/SWIFT wire through your bank. We recommend using TransferWise.

    If this proves difficult, you may need to contact customer support at support@wefunder.com.

    Full international investor guide here.

  • What fees do investors pay?

    For payments made by bank ACH, wires, or checks, Wefunder charges investors a transaction fee of 2%, with a minimum of $8 and a max of $100. For credit cards, Wefunder charges a 3.5% fee, with a minimum of $8 and no maximum.

    Investors can get their first investment fee free by completing the welcome sequence when creating their account (www.wefunder.com/welcome) and using their ACH bank account (US banks only) or a wire. Please note, this only applies to first investments.

    Fees are one time and are not reoccurring.

  • Why is my investment still pending?

    Your investment may still be pending because we are still processing your payment, you have action items to complete, or we are waiting for the fundraise to finalize.

    If your payment is still processing, here are our typical processing times.

    - Bank Transfers (ACH): It takes approximately 5-7 business days to confirm that funds are deposited.
    - Checks: Once the check is deposited into our third-party escrow account, they will send us the payment information and we will credit your account. Checks typically take 7-10 business days for us to receive and reconcile them.
    - Wire Transfers: 
    Once the wire is deposited into our third-party escrow account, they will send us the payment information and we will credit your account. Wires typically take 7-10 business days for us to receive and reconcile them due to the fact that there are several intermediary banks that they typically have to go through, and then occasionally a delay when it hits our escrow account and notifies our system.
    - If you are in a pinch for time, credit cards settle instantly. We highly recommend this if a fundraise is close to closing.

    To avoid any potential delays, be sure to include your unique investment ID on your wire or check.

    If you're paying by wire or check, you will need to provide additional information about the payment to help us reconcile it. To do so, after you've sent out the wire / check, log into Wefunder and go to your portfolio page and enter the information where is asks you to "provide payment info." 

    If your investment application has action items, you'll need to complete those in order for the application to be submitted successfully. You may need to provide your SSN (required for all investments), verify your identity (once your collective investments are more than $2,200), or verify accreditation status if you indicated you are an accredited investor or are making an investment over $25,000.

    If all of those are complete and your investment looks like it was submitted successfully, then we are just waiting for the fundraise to finalize. You will typically see a date for when this will happen on the timeline located in your portfolio page. Please note that this date is just an estimate and times may vary.

  • Why do you need my SSN?

    When making an investment on Wefunder, you need to provide a tax ID in order to invest. Tax ID generally means an SSN for an individual and an EIN for a company. We require these because when the company you invest in makes a distribution to investors (for example, if they get acquired) we’ll need to provide tax documents to you such as a Form K-1, which require us to include your SSN. If we don't receive your SSN, your investment will be canceled.

    We know you might be hesitant to provide this information, but we guard your SSN like our life depends on it. 

    We encrypt and store Social Security Numbers (SSNs) on a separate group of servers from wefunder.com. We use an RSA key to encrypt the SSN and isolate the private key from production machines. Access to the database that stores the encrypted SSNs is restricted within Wefunder to a need-to-know basis, and we have a policy for access if and when an employee may need to view an individuals SSNs (for example, if we're preparing a tax filing or investigating fraud).

  • I've been waitlisted. What does that mean?

    Some investors are waitlisted when a large number of people apply to invest and the company receives more money than they can legally accept. 

    It is quite common for a campaign to have a rush of investors as it gets closer to reaching its desired amount, which can create some misunderstandings on exactly "when" it becomes oversubscribed. 

    We will not be able to fully confirm investments until after the campaign ends and our Wefunder Closing Team works with them to get everything in order. Our automatic emails regarding the company will all mention the waitlist, including if you invested before it was oversubscribed and it just took a bit to process. You could be successfully in Reg CF, but still receive a waitlist email.

  • Why is my investment still in escrow?

    In order to execute your investment, there are a bunch of SEC guidelines and regulations we have to abide by.  Sometimes, it can take several months for us to finalize a fundraise after it closes. Once your funds have been sent to the company and your contract is countersigned, your investment will be marked as confirmed.

  • Why is my total investment less than I committed?

    We do not issue fractional shares, so we round down your commitment.

    For instance, if the share price of a company is $20, and you commit $250, we'll lower your commitment to $240 in order to purchase 12 shares.

    However, you will still be eligible for any perks you were expecting at that requested $250 level - each company fundraising will manage disbursement of perks after all contracts have been finalized. 

  • What is Wefunder Cash?

    Your Wefunder Cash account is a virtual wallet. Literally, the money is held by our third-party banking partner, Boston Private Bank (recently acquired by Silicon Valley Bank).

    Transferring funds to you Cash account right after making a reservation helps you to invest faster – you can apply funds from there once you confirm an investment.

    Any funds you transfer into your Cash account can be withdrawn anytime or used to fund a company. 

    More on Wefunder Cash & reservations here.


  • What does it mean to "reserve" an investment?

    When you make a reservation to invest, that company is currently in what we call the "Testing The Waters (TTW)" phase of their fundraise. This means they are taking pledges to gauge if they would have a successful raise. It is important to understand that reservations are non-binding and they do not guarantee anything such as getting in the fundraise, early bird terms, etc.

    For a TTW fundraise, the invest page will initiate a Wefunder Cash transfer, drawing funds from an investor's saved bank or wire account or do a pre-authorization of your credit card. When the fundraise goes live, you will be asked to confirm the reservation and payment will be applied at that time.

    Full scoop on reservations & Wefunder Cash here.


Refunds

  • Can I cancel my investment and get a refund?

    Yes. You can change your mind anytime up until a fundraise closes and you will receive a full refund, including any fees. Unfortunately, investments cannot be cancelled once the fundraise closes.

    You'll receive a five-day notice via e-mail when a fundraise is about to close. Additionally, we put a 7 day warning on the fundraise page to let investors know that it will be closing soon. You can cancel at any point up until the fundraise closes.

    Once the minimum funding target is met, many companies do a "rolling close", where investments that have successfully applied to invest are executed and funds are transferred, but the round is still open to receive new investments. You'll still receive a five-day notice if this occurs.  Once your funds are transferred to the company, you no longer can cancel your investment or obtain a refund. 

  • How will I receive a refund?

    When you cancel your investment or a campaign fails, a refund, including fees, will automatically be sent back to the bank account or credit card that was used to make the investment. 

    If you sent a check or a wire, your money will be refunded to your Wefunder Cash account. From there, you can refund the money to your bank account (US banks only) or wire the money to your bank (international investors only.) We cannot refund any check payment via check as stated when you chose this option to pay. These refunds must be completed by bank transfer or wire transfer. 

    We can also refund investments in Wefunder credit, which can be used toward future investments and fees!

  • How long will it take to receive my refund?

    We initiate refunds as we receive them, but it can take a few weeks to reach you, especially if you invested with a check or wire or from abroad. Our typical refund timeframes are as follows:

    - ACH Bank (US) - Within 3-5 Business Days
    - Credit Card - Within 3 Business Days
    - Wire (US) - Within 7-10 Business Days
    - Wire (International) - Within 10-14 Business Days
    - Wefunder Credits - Same Day

  • What are the limits on canceling an investment?

    Once the fundraise has a close date you'll receive a 5-day notice. In addition, you will see a 7-day countdown on the fundraise page. You have up until the fundraise closes to cancel.

    Once the minimum funding target is met, some companies do a "rolling close", where investments that have successfully applied are executed and funds transferred, but the campaign is still open to receive new investments. 

    You'll still receive a five-day notice when any close is about to happen.

  • Can the company not accept my investment?

    Yes.  Companies may choose not to accept your investment for any reason. One reason may be that they discovered you worked for a major competitor.

    After the round closes, and the company has countersigned the contract and received the funds, your investment can no longer be cancelled.

  • When will the fundraising round close?

    The fundraise round will close for certain at the company's offering deadline. 

    However, almost always, a successful fundraise closes earlier (although it must be open for at least 21 days).  Additionally, some companies may do a "rolling close" after 21 days have passed and their minimum fundraising target is reached.

    When a round closes earlier, you will receive a five-day notice before the closing date via email and a 7-day countdown will be on the visible on the fundraise page.  

  • What happens if the fundraise fails?

    You'll be notified via email and will receive a full refund of your investment, along with any fees you've paid.

  • How long will it take to receive my Wefunder Cash refund?

    You can expect your Wefunder Cash refund within 5-7 business days. We do our best to process these requests quickly, but any delays are typically due to fraud checks that we have in place to ensure that our investors and their money are safe.

Legal

  • Which offerings am I legally allowed to invest in?

    It depends on whether you’re an accredited or non-accredited investor. If you’re accredited, you can participate in all security offers. If you are non-accredited, you can invest in Reg A+ and Reg CF offers.

  • What’s an accredited investor?

    Accredited investors are wealthy people: typically, they make over $200,000 per year ($300,000 if joint with spouse) or have over $1M in assets, minus their primary residence.

    To find out your investment limits, open an investor account.

  • How do I verify my accredited status?

    If you meet the qualifications for accreditation and would like to verify your status, you'll need to submit documentation that confirms your income or net worth. You can do this in your settings (www.wefunder.com/settings).

    Here's what we'll accept:

    - A letter from a lawyer, accountant, deal-broker, or investment advisor indicating that they have seen your financials and can confirm that you meet the accreditation requirements.
    - Tax forms like W-2s, 1099s, K-1s, etc.
    - Certificates of deposit , tax assessment, or appraisals.
    - If you're investing from outside the US foreign, convert your country's currency into USD to determine if you meet the threshold.

  • How much am I allowed to invest?

    It's complicated.  Thankfully, when you sign up for a Wefunder account, we'll do all these calculations for you.


    The amount you are legally allowed to invest depends on which Regulation the company uses to fundraise.

    For Regulation Crowdfunding offerings, Wefunder calculates your annual investment limit based on the net worth and income provided upon account opening. Investment limits are for every 12 month period. Every investment in a Regulation Crowdfunding offering counts towards the annual limit. We will not let you invest more than this amount. The SEC made it pretty complicated to calculate this number, but if you're curious:

    - Everyone can invest at least $2,200
    - If either your net worth or income is below $107k, you may legally invest a maximum of 5% of the greater number.
    - If both your net worth and income are above $107k, you may legally invest a maximum of 10% of the greater number, up to a max of $107k.
    - Accredited investors will be able to invest as much as they'd like in Reg CF offerings.

    For Regulation A+ offerings, unaccredited investors can invest up to 10% of income or net worth per year, whichever is greater.

    For Regulation D offerings, only accredited investors may invest, and they have no limits.

    Please note: For any investment higher than $25k, we require proof of accreditation regardless.

  • Can I invest if I don't live in the United States?

    We have investors from all around the world! With a few exceptions, we accept investments from international investors, as long as you represent that you are complying with the law in your country. Here's a step-by-step guide on investing from outside the US.

    The only exceptions are the Provinces of Quebec, Ontario and Alberta which have requested that we bar their residents from investing on our platform.

  • Can I add a spouse or beneficiary to my investment?

    Unfortunately, we do not offer joint investments. Each contract must be between the individual investor and the founder of the company receiving the investment. There should only be one person per account.

  • A company is citing one of the “SEC’s Temporary Amendments” in their financial disclosures section... What the heck does this mean?

    Due to the impact of COVID on small business, the SEC issued a temporary relief order with a few amendments meant to ease the process for companies looking to raise. You can read the full order here, if you're curious. Some of these amendments center on how a company must go about disclosing its finances. 


    Here were the pre-existing guidelines:

    - A company intending to raise up to $107k had to produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer.
    - A company intending to raise more than $107k had to produce CPA-reviewed statements.

    Here's what the temporary relief order changes (note that these changes only apply if a company has been incorporated for at least 6 months): 

    - A company intending to raise up to $250k can produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer. 
    - A company 
    intending to raise more than $250k must produce CPA-reviewed statements.
    - A company
    can file a Form C (read: launch a campaign) without any financial statements, provided they’re added in prior to the company accepting investments. Basically, this means that every company must disclose financials to actually accept any money from investors but some companies are exempt from including their financial info when initially filing their offering.

  • A (super) quick guide to investing via an entity.

    To make an investment via an entity, you don't need to create a new Wefunder account! As you're making the investment through your account, you will change the "Investor Info" from investing as yourself to your entity using the dropdown menu (you may need to click edit on box 2 to get this option). If you don't have an entity listed in your account, you can click the option that says "+ Add New Entity". Based on how you want to invest, you can toggle this on and off as you make each investment on Wefunder.

    Please note that your account legal name should be YOUR name as the manager of the entity. You are allowed to put your entity name as your public name if you wish to do so.

  • How do oversubscriptions work?

    When a company gets more investment commitments than they're allowed to close on, their campaign is "oversubscribed". Under Regulation Crowdfunding, a company can legally raise a maximum of $5M in a 12-month period. Companies may also set a lower funding goal to avoid some extra legal work.

    When a round is oversubscribed, we open a parallel round under Regulation D (Rule 506(c)) to accommodate more investments. Only accredited investors qualify, and funds closed in the Reg D don't count towards the limits under Reg Crowdfunding. Investors in the Reg D receive the exact same price, terms, and contract, plus we waive our fees on those investments. Investors will receive an email notifying them if their investment is moved under Regulation D. 


Troubleshooting

  • How do I complete my investor account?

    Fill in all the information on your investor profile

  • How do I change my password?

    To change your password, go to wefunder.com/settings. Find Password and choose Reset to create a new password.


  • I forgot my password.

    No worries! If you forgot your password, go to wefunder.com/login and click Forgot Password. Enter your email address and we'll send you a link to reset your password. 


  • I need to change the name on my investment.

    If your investment has not been confirmed, you can reach out to our Investor Success Team for help (support@wefunder.com).  If the investment is already closed, you will need to contact the company you have a contract with to make this change. Once the company has approved the change, then we will be able to update our copy of the contract on our end.

  • How are contracts signed?

    Everything is handled electronically. You sign a contract when you apply to invest. The founder will sign the contract after the fundraise closes and finalizes the raise. Once the founder countersigns, you'll be to find the contract in your portfolio.

  • I get too many emails. Can I unsubscribe?

    To unsubscribe from Wefunder emails, go to your email settings. You can subscribe to certain categories of emails and only receive emails that are relevant to you. Such categories include the following:

    You will still receive emails from Wefunder relating to transactions and account activity.  In addition, you will still receive updated from companies you have invested in and that are on your watchlist. If you wish to no longer receive those, you can change the last setting to "never".

  • How can I ask the founders questions?

    For any company currently fundraising, you can ask the founders questions directly on the fundraise page by clicking the "Ask a Question" tab. Founders monitor this forum and answer as they are able.


  • When will I receive my perks?

    The founder(s) of the company you invested in should reach out shortly after the fundraise has ended and finalized with information on how to claim any perk(s) you may have. If you do not hear from them, you will need to contact the company as they are the ones that take care of perks. Please note: Wefunder does not monitor or facilitate the perks that a company offers during their raise.


  • Can I make an investment as a gift?

    Investing in startups on Wefunder is a bit different than the stock market - contracts are not easily transferrable and the person who will own the security needs to also be the person who consents to invest. 

    That said, there are plenty of companies on Wefunder that sell cool stuff that make awesome gifts! Feel free to browse through our Explore page.