This guide covers all the good stuff around accessing your funds and finalizing your Wefunder round: wrapping up administrative details, finalizing investment commitments to make funds available for disbursement, finishing investor-related documents and contracts, and getting. that. money. 💸
*If your round is currently live and you're looking to withdraw funds, scroll down to the section titled "What if I need some capital while the round is open?"*
Your round closes on the date set in the Form C as the deadline to reach the (minimum) target offering. If you don’t reach your minimum by the round close date, we’ll have to cancel your round and refund investors. If you do reach your minimum, congrats! We’ll start the administrative process of finalizing your round and disbursing funds to you.
Where do I find my round close date?
You can find your round close date on your Form C in the first section, under “Deadline to reach the target offering amount.” You can also see it on your /manage page under "Important Dates".
Can I change my close date?
Wefunder allows one extension per round with a maximum round duration of 6 months. You can also choose to close your round early (provided it's been open for at least 21 days), though you must provide investors with a 5 business day closing notice. (We'll need notice to make this happen, so let us know at your earliest convenience if you want to close early). To make adjustments to your close date, reach out to us at email@example.com.
How does closing work?
21 days before your round closes, we’ll reach out to confirm the date your round is closing and initiate next steps. If you have not yet used an extension and would like to, you can do so at this time. At this time, we’ll provide an update on:
- Funds committed: This refers to all investments committed to a round — whether funded or unfunded. It’s every dollar someone said “I’m going to give to [company],” whether or not said dollar actually made its way to Wefunder.
- Funds available: This includes all investments with funds in escrow and ready to be disbursed.
- Unavailable or "blocked" investments: This includes all investments which are either unfunded or have funds in escrow but are not ready for disbursement due to another issue (learn more about issues that can block an investment in Section II).
In order for your round to be successful, you must clear your minimum target offering with available funds. It’s OK if unavailable investments become available after the campaign closes, but all commitments must be made before you close.
If you are unable to reach your minimum target offering in available funds, your round will be canceled and all investors will be notified and refunded.
What if I need some capital while the round is open?
Some founders choose to take advantage of a rolling close, which allows you to withdraw one tranche of available funds from your round while it remains open. To qualify, you must have at least your minimum offering amount in available funds to do so. If you launched your round without a lead investor or financials, we'll also need to first file a material amendment that formally adds those things to your campaign and give investors 5 business days to reconfirm. If you surpass your minimum, and have your lead investor and financials, we'll automatically schedule you for a first rolling close 21 days after you file your Form CYou can become eligible for subsequent rolling closes each time you raise another 100k, and you can request another rolling close each time. Additionally, if you've received one rolling close and have a significant amount of funds that can be sent but have yet to request a second, we might send you one proactively.
Additionally, investors with investments eligible for disbursement must first be notified that you're initiating a rolling close and will have 5 business days to opt out of the tranche. We send this email out 2 weeks before your disbursement. Once the 5 business day period is over (provided you are still over your minimum in available funds) you can receive a disbursement; we run a weekly tranche schedule with disbursements happening on Fridays.
When you withdraw funds during a rolling close, you will countersign contracts for all investments included in the rolling close. This means that you’ve executed contracts with those investors whose funds are disbursed, and your round is officially successful. It also means that you can no longer cancel your round and refund investors whose funds you have withdrawn. Note: Once you get the email with contracts to countersign, we will have to disburse those funds before we can send any more.
If you’d like to initiate a rolling close, visit your manage page by going to wefunder.com/companyslug/manage and click on the "Request Funds" button or free to reach out to us (firstname.lastname@example.org) to confirm the status of your available funds. Please note it may take a few weeks to set everything in motion and receive your wire.
While this process can take time, we invite you to visit our founder deals page, including discounts, referrals and other benefits. Here, you can find a bunch of our partners (some are even Wefunder alums themselves!), who are excited to partner with Wefunder companies.
Congrats on your successful round! So what’s next?
Our goal is to get you an initial tranche of available funds within 3 weeks of your close date. A member of our team will check to make sure your available funds are over the minimum threshold and work with you to schedule a tranche date.
We'll then work to clear blocked investments and ready them for a final disbursement. We will email everyone whose investments are blocked (and might ask you to do the same) and prompt them to take the necessary steps by a deadline. Once the deadline has passed, we’ll cancel all remaining blocked investments and slot you in for the final wire.
We typically disburse all funds within 2-3 tranches, depending on the size of your raise, whether or not you have early bird terms, the number of blocked investments, etc. When we schedule you for your first partial tranche, we'll be able to give you a general timeline of how long this whole process will take based on your raise.
Some common reasons why investments are blocked and how to clear them:
To resolve an issue with an investment, the investor can visit their "My Investments" page at https://wefunder.com/portfolio. Here they will see and be able to resolve any issues with all investments.
- Needs transition: The investor made a reservation before the campaign was officially live and now needs to move their funds over to the live campaign
- Payment failed or missing payment: The investor has committed to investing but we have not yet received their payment.
- Reconfirm investment: If an investor needs to reconfirm their investment due to a material change, their funds (even if in escrow) will be blocked until this is resolved. If the investor doesn’t reconfirm the investment within 5 business days of viewing the material changes, the investment must be canceled per SEC regulations.
- Re-sign contract: If an investor needs to re-sign their contract to agree to some change of terms during the raise (i.e. if they’ve been upgraded to Early Bird terms), their funds (even if in escrow) will be blocked until this is resolved.
- KYC/identity verification: We're unable to verify the investor's identity with the documents provided; they'll need to provide a photo ID or their SSN.
- Accreditation verification: We're unable to verify accredited status with the documents provided; they'll need to upload a document to verify their status as an accredited investor.
- Tax ID: Some companies require that investors provide a tax ID number in order to invest, as their corporate structure will require them to send annual tax documents.
- Reconciliation and refunds: These and a handful of other blockers are mostly housekeeping on Wefunder’s side, and we usually don’t handle them until it’s time for a final tranche. However, if all other blockers have been cleared and our housekeeping items are keeping available funds from climbing over your minimum, we’ll make an exception and clear them early.
Update your cap table
If your fundraise used our SPV or Custodian structures, all your Wefunder investors will only take up one (or a few) lines on your cap table – woot!
If you used an SPV, that will be the entity listed on your cap table.
- Fundraises without early bird terms will have just one SPV named [Company Name] [#], a series of Wefunder SPV, LLC.
- If you used Early Bird terms, there will also be a second SPV holding your early bird investors, called [Company Name] [#] EB, a series of Wefunder SPV, LLC.
- If some investors invested using Reg D (eg. due to oversubscription) there will be another SPV holding your Reg D investors, called [Company Name] [#] D, a series of Wefunder SPV, LLC.
Stock certificates should be issued to the SPV(s) based on the date of disbursements you received. So if you did more than one closing, your SPV(s) will be issued more than one stock certificate. This just means they’ll be listed more than once in your stock ledgers, even though they take up only one line on the cap table. If you offer Early Bird terms, you may need to divide up a disbursement into two stock certificates (one for the Early Bird SPV, and one for the regular SPV). Stock certificates for the SPVs can be issued (ie. sent) to email@example.com.
A Quick Example: Jake’s Rakes raised $5.5M in SAFEs, of which the first $1M was on Early Bird terms. Because Reg CF is limited to $5M, the last $500K was raised via Reg D. The company did a rolling close of $500K on March 1, and a final close of $5M on July 1. Here are the stock certificates Jake would issue:
|Jake’s Rakes I EB, a series of Wefunder SPV, LLC||March 1||$500K||Early Bird||Reg CF|
|Jake’s Rakes I EB, a series of Wefunder SPV, LLC||July 1||$500K||Early Bird||Reg CF|
|Jake’s Rakes I, a series of Wefunder SPV, LLC||July 1||$4M||Regular||Reg CF|
|Jake's Rakes I D, a series of Wefunder SPV, LLC||July 1||$500K||Regular||Reg D|
If you raised using our Custodian structure, the process is the same but the only line you need to list on your cap table is XX Investments LLC, which represents all your Wefunder investors. Stock certificates for the Custodian can be issued to firstname.lastname@example.org.
Another Quick Example: Using the example of Jake’s Rakes above, here are the stock certificates they would issue:
|XX Investments LLC||March 1||$500K||Early Bird||Reg CF|
|XX Investments LLC||July 1||$500K||Early Bird||Reg CF|
|XX Investments LLC||July 1||$4M||Regular||Reg CF|
|XX Investments LLC||July 1||$500K||Regular||Reg D|
If you didn’t raise using either our SPV or Custodian structures, then each investor should be listed individually on your cap table based on the date their funds were disbursed to you.
If you have any questions about how to list your Wefunder investors on your cap table, ping our superhuman closing team at email@example.com!
Finalize Your Legal Filings
Once your fundraise is complete, we can help you file a "Form C - Progress Update" (Form C-U) with the SEC, which states the final amount you’ve raised in the round.
If your raise had a Reg D component (eg. due to oversubscription), you’ll need to file a Form D with the SEC. This is a simple filing that you’ll need to have your own lawyers take care of.
Depending on where you are incorporated/operate, you may need to submit a state filing. You can read more in our FAQs here.
Woohoo! You’ve completed your raise and now have hundreds (or thousands) of investors. Now it’s time to make good on your promises to them + keep them up-to-date on your progress.
*Once all investments are disbursed, we’ll follow up with a zip drive of your executed contracts and a final investor list. Remember, once contracts are executed, you have a legal relationship with your investors. Be mindful to adhere to the terms of the contract, and to keep their personal information secure (do not share investor lists with third parties – they may be scams!).
Make Good to Your Investors
Revisit your pitch page, investor contracts and Form C to see what is owed to investors and prepare to delight your supporters by making good! This includes sending out any promised perks and repayments where applicable.
For Revenue Share or Loans: Ping firstname.lastname@example.org to make sure your repayment schedule is set. You can find the terms in the template contracts your team reviewed (also linked at the bottom of the Form C page). Keep in mind that Early Bird contracts will have different terms.
For Equity, SAFEs and Convertible Notes: Work with your attorney or reach out to email@example.com to learn about our partners who can work with you to issue stock certificates, provide cap table management, etc. Make sure to follow up with investors and send them updates about this!
Send Investor Updates
Your new Wefunder investors form a community of your most committed users and supporters who can (and want!) to help grow your company. But to leverage your investors, you need to keep them up to date on what’s going on! You also agreed in your Listing Agreement (accessible at wefunder.com/company_slug/listing_agreement) with Wefunder to use your best efforts to provide at least quarterly updates to your investors.
We strongly recommend posting at least quarterly updates to keep your investors engaged and aware of how your company is doing! Updating and engaging investors can be crucial to your company’s success – especially if you're thinking of raising from the crowd again! These updates can be just a few paragraphs highlighting the company’s progress and any new initiatives you’re working on. Looking for an example? Check out our quarterly investor updates here.
Submit Your Annual Report
Under Reg CF, you’re required to file at least one annual report – due no later than 120 days after the end of your fiscal year. You can see the exact requirements in our FAQs here. Most companies only need to file one annual report and you aren’t required to get an audit or review of your financials done for the annual report. Easy peasy!
Keep Us Up-To-Date
When you raise with us Wefunder, you agree to notify us of any future rounds of financing or acquisitions, including the price per share and the pre- or post-money valuation of the company at that time. (If you raised using our SPV structure, this is contained in your Listing Agreement [wefunder.com/company_slug/listing_agreement]). This helps us keep your investors up to date on your progress and lets us work with you on the mechanics where needed. In particular, if you plan to be acquired or go public we’ll need to work with you on distributions to our investors, so please loop us in early! Send us updates at firstname.lastname@example.org.
Send Out Tax Documents
If your company is an LLC that’s taxed as a partnership or you’ll be making regular payments to investors, you’re required to send out yearly tax documents to your investors on Schedule K-1. They’ll then file this with their personal income taxes. If you’re using an SPV, you’ll also need to distribute K-1s when your company is acquired or liquidates. We can help provide you with the info needed to generate and distribute K-1s – ping us at email@example.com!
Refer a Company, Get $2,500
Know any founders that Wefunder would be a good fit for? Refer a company to us and get $2,500 when they file their Form C. More deets here.
If your round is successful, we’d love for you to raise another down the road with us! Feel free to reach out to your Wefunder contact at any point in the future.
And… as always, feedback! We would love to hear from you! Please email firstname.lastname@example.org with any thoughts, complaints, celebrations, or anything you’d like to share with us.