WeFund SPV for Founders
- What is a WeFund?
- Why use WeFunds?
- Can I invite anyone to invest directly, bypassing the WeFund?
- Who manages the WeFund?
- Who decides who gets to invest in the WeFund?
- Do WeFund investors have voting or information rights?
- How many can invest in a WeFund?
Most startups on Wefunder raising funds under Regulation D do so with a WeFund. A WeFund is series of an LLC that exists for the sole purpose of investing in one specific startup. All the investors pool their capital in the WeFund, which then invests as one entity in the startup. The startup only has one direct investor: the WeFund.
Startups use a WeFund to ensure their follow-on financing won't be at risk. Venture capitalists are uncomfortable when startups have many small investors (they don't like collecting thousands of signatures). With a WeFund, all those smaller investors are represented by one large entity: us.
Yes. If you meet an investor who wants to invest a smaller amount and doesn't wish to use the WeFund, you may invite them to invest directly in your company. This is up to your discretion.
WeFunds are managed by our fully-owned affiliate: Wefunder Advisors, an exempt reporting investment advisor. Technically, the smaller investors who invest via the WeFund are not your investors: they are ours.
We do, but with your input. We've found that startups are often too busy to research people who want to invest smaller amounts like $100. If your deal is over-subscribed, we prioritize the investors who we feel can help your company the most. At the end of the day, we're trying to find the best investors for your startup, so feel free to tell us what you are looking for.
No, Members of the WeFund do not have voting or information rights. All voting and information rights are proxied to the Moderator of the WeFund, Wefunder Advisors, which will act on their behalf.
Due to regulations, only 99 investors may invest in a WeFund.