- What is Wefunder?
- How are you different than Kickstarter?
- Why raise funds from the crowd?
- How are you better than your competitors?
- Who else has raised funding?
- How many investors are on Wefunder?
- What fundraising exemptions do you support?
- Do you group all investors into one shareholder?
- Do all those investors have voting rights?
- What do you charge?
We are like "Kickstarter for investing". Your friends, customers, supporters, and local community can invest in your company.
We help you raise more money, faster, so you can get back to what matters: building your startup. Plus, you'll have an army of evangelists motivated to help you succeed.
Wefunder lets investors own a small stake in your company, while Kickstarter allows you to sell products.
We think Kickstarter is super cool, but a customer is very different than an investor. A customer just expects a product – an investor wants to help your company long-term.
Make your most loyal customers into owners. They are often your most passionate evangelists.
Investors have a financial interest in helping your business succeed. For instance, if you own brewery and your customer is also your investor, she'll likely drink more beer there, and bring her friends more often.
Need help recruiting an an engineer? Looking for an intro to a key VP at a big company? Want feedback on your product from an industry insider? A crowd of investors can help increase your "luck surface area".
We're the largest funding portal by dollars raised, number of companies funded, and number of investors.
Because we know what it takes to work with good companies, we have one of the best portfolios in the industry. You want to raise funds on a website alongside other good companies.
We understand that founders are busy running their startup, so we do all the grunt work for you. More than that, as founders ourselves (not finance guys or bankers), we know exactly what you are going through. We're a friendly team.
Finally, we charge no fees up-front, and, if you can find a better offer on price, we'll match it.
Wefunder itself was the first startup to do so. We raised over $7 million from about 500 investors. We've since funded over 174 companies, including Zenefits, Checkr, Meow Wolf, Gingko Bioworks, Freight Farms, Everipedia, and Goldbely. Many are alumni of Y Combinator.
As of early 2018, there are about 150,000 registered investors on Wefunder that have invested close to $56 million.
We support Regulation A+, Regulation D 506(b) and 506(c), and Regulation Crowdfunding. To learn what all this means, and to choose the best one for your business, read our Founder Legal Primer.
If you are raising with Regulation D, we can group all of your small investors into one shareholder on your cap table using a WeFund SPV. For Regulation Crowdfunding, we created a special Crowdfunding SAFE that proxies all voting power to a Lead Investor and the CEO.
If you use a WeFund, no. We avoid this by having small investors proxy their voting rights to Wefunder, and we act on their behalf. We will exercise all of the voting rights held by a WeFund in the interest of the fund's investors.
Small investors also don't have any voting rights if you use the Wefunder Crowdfunding SAFE.
It's free to create a company profile on Wefunder.
Wefunder charges 7.5% of the total fundraise, only if successful. For instance, if a company raises $100,000, we charge $7,500 upon close.
- Can a non-U.S. company fundraise on Wefunder?
- Is my company a good fit for Wefunder?
- What kind of businesses can fundraise?
- When am I ready to start fundraising on Wefunder?
- Let's do this! How do I start fundraising on Wefunder?
- Can I use Wefunder if I'm not fundraising?
- How long will it take until my fundraise is live?
No. Unfortunately, we can only accept companies in the United States.
We've found that companies with certain qualities have a greater success rate:
- Do you have a strong community of friends, supporters, fans, or customers? Most companies bring in ~50% of their investors.
- Are you doing something really cool that no one has ever done before? Investors get excited about being part of something ambitious.
- Does your product directly improve people's lives? People like to invest in things that do good in the world.
- Do you have at least one investor investing on the same terms?
- Do you have some traction? Investors like proof you can execute.
We accept nearly any type of company, be it a brick-and-mortar restaurant or a high-tech software startup. However, we do not fund marijuana, porn, gambling, banking, or investing companies.
We fund companies at all stages: you can use Wefunder to raise as little as $50,000. However, unless you plan to raise from only a circle of close friends, we recommend not fundraising on Wefunder until you have some proof points that can convince investors you "get stuff done," and are not just a dreamer. While there are no requirements, we recommend at least one experienced investor that publicly endorses your company, and sets the terms of your fundraise. It also helps to have at least a working prototype, and ideally, a few paying customers. But before then, create a free profile, and start collecting followers!
That's awesome! We're excited to help you fundraise. Head over to our fundraising page and fill out your information. We'll get back to you within three days with an estimate of how much you can raise.
Yes! You can create a profile for your company and collect followers who care about your mission.
1. Terms and Disclosures
It’s hard to say how long this takes since it varies a lot, but plenty of people are able to get these done in a weekend or two if they are motivated!
2. Generate the Form C and Review (1-2 Weeks).
Once Step 1 is complete, Wefunder will generate a draft Form C. You’ll need to review it, have your lawyer review it, and populate anything that’s missing.
3. Final Review and Launch (1 Week).
During the final review, multiple people will do a thorough review, and then we'll make sure the data is in a form that we can submit to the SEC. Most of the work is on our end at this point, though we’ll need some input and clarification from you from time-to-time.
- How do I start a profile?
- How much does it cost to create a profile?
- How do I build a good profile?
- Can I include projections in the profile?
- Can I share my profile before filing with the SEC?
- How do I delete my profile?
Visit Raise Funds, put in your company name, then hit that green button.
We wrote a guide for that!
When building your profile, avoid future promises and forward-looking numbers like: "We plan to make $5 million next year." Instead try: "We hope to continue growing by doing x, y, and z." If you decide to fundraise on Wefunder, you are legally liable that every statement on your profile is 100% true, and that you have not omitted any important information investors should know about (for example, a lawsuit). Read the Legal Primer for more information.
Yes, you can share your profile publicly. However, until your fundraise is enabled on Wefunder and your Form C is filed, it is not legal to say that you are fundraising now, or have a concrete plan to do so in the future.
You are allowed to ask people to "follow" your profile to show their support, but are not allowed to say things like: "We are going to fundraise on May 16th" or "as soon as we file with the SEC, we'll be raising at a $4 million valuation."
Deleting your profile will delete all traces of your company on Wefunder, including any disclosures you've filled out. If you're sure you want to delete your company, navigate to the profile editor and look under the "Misc" tab.
Terms & Contracts
- How do I choose the contract and set the terms?
- What's the difference between debt and equity?
- What is a Revenue Share best for?
- Which startups should use a Wefunder SAFE?
Your investment contract is the most important part of your fundraise. If you choose the wrong contract, or have bad terms, no one will invest, and you will have wasted a lot of time. It's like trying to sell a dozen eggs for $100. People are not stupid.
We recommend using Wefunder after at least one angel investor who already knows you has invested $25,000+. This makes it far more likely you chose the right investment terms.
That said, we know in some parts of the country, there are just not many angel investors who invest in early stage companies. So we'll try to help figure out what are good terms if that's the case.
The right terms is very specific to your company, but here's some general advice for two kinds of companies that are more unlikely to have prior investors:
For an early stage technology startup that has as a reasonable chance of getting funded by venture capitalists, we recommend either a convertible note or a Wefunder SAFE. Valuation caps for early-stage technology startups with no prior investors can range from $2 million to $5 million. It's possible for the very best early-stage startup (such as a Y Combinator startup) to raise at closer to a $10 million valuation cap. However, if that's the case, then you will be in a position to have at least one prior professional investor who set the terms.
- For an early stage brick and mortar with expected cash flow, we recommend a revenue share contract. We recommend offering at least a 2X return. Then, make a spreadsheet of all your projected cash flows for the coming 6 years. We recommend choosing the percent of revenue to share that would investors a predicted 10%+ annual return.
- For an early stage technology startup that has as a reasonable chance of getting funded by venture capitalists, we recommend either a convertible note or a Wefunder SAFE. Valuation caps for early-stage technology startups with no prior investors can range from $2 million to $5 million. It's possible for the very best early-stage startup (such as a Y Combinator startup) to raise at closer to a $10 million valuation cap. However, if that's the case, then you will be in a position to have at least one prior professional investor who set the terms.
The biggest difference is the risk & reward. Debt is slightly less risky for investors, but there is also much less upside. Equity is riskier, but potentially much more lucrative.
Debt. Investors lend the company money today in exchange for more money tomorrow. Investors are not shareholders, although they do have a right to company assets if the company goes under. We have two template debt contracts: Simple Loan and Revenue Share.
Equity. Investors buy shares or units in the company in exchange for ownership. Investors earn a return if the company is acquired, goes public on the stock market, or pays dividends. We offer one template equity contract, the Wefunder SAFE. There are other ways to structure an equity deal; if the Wefunder SAFE doesn't fit your needs, your lawyer can draft a custom contract for you. Some examples include Convertible Note, Preferred Stock, and LLC Ownership Interests.
While there are exceptions, we've seen equity offerings perform better on Wefunder. About 85% of our funding volume are equity.
- Debt. Investors lend the company money today in exchange for more money tomorrow. Investors are not shareholders, although they do have a right to company assets if the company goes under. We have two template debt contracts: Simple Loan and Revenue Share.
A revenue share is best for early stage brick and mortar businesses making cash. This is a promissory note that is paid back from a share of the revenues of the business. It's typically more exciting for investors than a standard loan. Since the payments vary based on revenues, it can also be safer for a company with less predictable cash flows.
Here's how it looks on the profile:
To preview a sample, download the Revenue Loan Agreement. By default, the following terms are customizable in our template:
- 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.
The Wefunder SAFE is designed for a technology startup raising under Regulation Crowdfunding, that intends to eventually raise venture capital.
Inspired by the Y Combinator Agreements, a SAFE (Simple Agreement for Future Equity) grants an investor the right to purchase equity at a future date.
It looks like this on the profile:
Unlike a convertible note, a SAFE is not a loan. As such, it does not accrue interest or have a maturity date. This makes things simpler and negates much of the need to amend the agreement in the future. For example, it helps startups not waste time extending maturity dates or revising interest rates, if a Series A financing takes longer than you first expect. It also better aligns with the intention of most equity investors, who never intended to be lenders.
We feel Regulation Crowdfunding requires a SAFE with several extra protections not common in Regulation D fundraises with accredited investors. The Wefunder SAFE:
- Has Repurchase Rights. The company may opt to repurchase an investor's SAFE prior to conversion at Fair Market Value if the 12(g) reporting requirements are triggered. Fair Market Value is determined by an appraiser the company chooses.
- Can be Amended by One Lead Investor. The lack of a maturity date and interest rate negates the need for common amendments of convertible note financings. However, if an extraordinary situation requires an amendment, you will not be required to chase down hundreds of signatures. The company designates a Lead Investor Representative, and all investors agree to allow that person to unilaterally amend the SAFE.
- Grants CEO Power of Attorney for Minor Shareholders. Once the SAFE converts into equity, investors who are not Major Shareholders grant the then-current CEO a power of attorney to vote all shares and execute any documents on their behalf. This mitigates the potential problem of hundreds of minor shareholders slowing down follow-on financings.
Investors Represent They Follow Investment Limits. All investors indicate if they are accredited or unaccredited. They represent they are in compliance with the investment limitations of Regulation Crowdfunding.
The following terms are customizable:
- Valuation Cap. The Valuation Cap is the most important term. It entitles investors to equity priced at the lower of the valuation cap or the pre-money valuation in the subsequent financing. Typical Valuation Caps for early-stage startups currently range from $4 million to $20 million.
- Discount Rate. The default is 0%. This term is now rarely used and not recommended unless a major investor asks for it. It gives investors a discount on the price of stock, when the pre-money valuation is less than your valuation cap. Typical discounts range from 0% to 10%.
- Governing Law. We default to Delaware, but you may change to any state.
- Major Shareholder Threshold. The default is $25,000. Accredited investors investing greater than this amount have voting rights and do not grant the CEO a power of attorney.
- Pro-Rata. By default, Major Shareholders have pro-rata rights and therefore have the opportunity to maintain their ownership share in subsequent financings. You may disable pro-rata rights for all investors.
- What legal issues do I need to be aware of?
- What's the minimum amount I can raise?
- What's the maximum I can raise?
- How should I set my fundraising target?
- How should I write the Use of Funds?
- How do I write Risks?
- Financial Requirements: Regulation Crowdfunding
You should carefully read the Founder Legal Primer.
With Regulation Crowdfunding, you can raise $1,070,000 per year.
You can, however, raise an unlimited amount under Regulation D from accredited investors. Wefunder will spin up a free Regulation D campaign for you if you cross $1,070,000, so you can raise more money.
For those who raise $1 million with Regulation Crowdfunding on Wefunder, we will host a Regulation A+ campaign for free. With Regulation A+, you can raise up to $50 million per year.
You must hit your minimum funding goal for the campaign to be successful.
We recommend setting the funding goal to the lowest amount of money you can make use of, then specifying how you'd use any extra cash. For instance, if it costs $50,000 to purchase a new budget-widget-maker, but you could use $500,000 for a super-awesome-widget maker, set $50,000 as your funding target. Then indicate what you'd do with the $500,000.
We also require that your minimum goal be enough to give your business at least 6 months of runway.
The SEC requires you to disclose how you will be using the funds you raise. Obviously, you can’t be sure where every dollar will go, but you can estimate how you’ll use the $100,000 you raise. Tell us your plans for both your minimum and maximum funding goals.
You should include every risk that you can think of that is specific to your business.
Do not think in terms of “these risks are going to scare away investors!” because painting a rosy (but incomplete and inaccurate) picture for your investors is bad for every party involved, including yourself.
Investors respect transparency. Writing down the risks not only helps investors make a sound decision; it also protects you as a founder.
- Disclose All Risks. Disclose everything you can think of that is specific to your company and industry.
- Be Specific. The law requires that these risks be specific to your business, not generic boilerplate.
- Write At Least Six. Our system requires a minimum of six risks along with a few sentences of description for each. But we strongly recommend erring on the side of caution — even if you’re not sure, add it.
It's hard to think up risks out of thin air. This is why we've drafted a huge document trying to capture all the risks that can be relevant. It's a beast of a document, but definitely useful to dig through.
You ready? Open if you dare.
The law requires that you disclose up to two years of financials in GAAP (generally accepted accounting principles) format.
If you are raising less than $107,000 you must provide GAAP financials as explained below, which include an explanation of your taxes in the notes section (note: full tax statements will not be required.) These do not have to be reviewed by an independent CPA.
If you are raising more than $107,000, you will also need a CPA Review Statement.
We can introduce you to CPAs that can do this work for you quickly and cheaply.
However, if you are using your own CPA, please provide them with this information:
1. GAAP Financials must include:
Statement of Cash Flows
Statement of Stockholder's Equity
Notes ← Make sure this is included.
Notes are typically 2-5 pages and describe your major accounting policies. Here's an example of GAAP financials.
2. Years required:
Incorporated within 120 days of the fundraise: Need balance sheet as of a date in that period, which may be the inception date
Incorporated 2019: Need GAAP compliant 2019 financials (from inception)
Incorporated 2018: Need GAAP compliant 2018 financials (from inception)
Incorporated 2017: Need GAAP compliant 2017 and 2018 financials
Incorporated earlier: Need GAAP compliant 2017 and 2018 financials
If your fiscal year is not 12/31, please provide year end financials. Your financial statements cannot be more than 16 months old.
Even if you are pre-revenue and have $0s all the way through- these statements are still required.
NOTE: PLEASE DO NOT JUST SUBMIT YOUR TAX STATEMENTS, OR QUICK BOOKS. THEY MUST BE IN THE CORRECT FORMAT TO BE ACCEPTED BY THE SEC.
Have you raised a Reg CF round in the last 12 months?
If yes, and you are raising more than $535,000 through two offerings, within a 12 month period, you will need audited financials. These will have to be completed by a CPA who is qualified to complete audits.
- Does Wefunder curate the startups on its site?
- What is the default sorting of companies on Wefunder?
- Why isn't my live fundraise showing up on the Explore page?
- Help! I need to change something on my profile, but it's locked.
- Can I pay to be featured more highly?
- Am I allowed to promote or advertise my fundraise?
- What legal restrictions are there on advertising?
- What can I say (or not say) in "real life" to the public?
- How should I set up my marketing strategy?
- How do I get mentioned in Wefunder's newsletter?
No. It's not our role to choose what is worthy of investment. We screen companies for signs of fraud, but we do not otherwise pass judgment.
Offerings are sorted by objective metrics including page views, press mentions, Twitter followers, Facebook likes, investment velocity, number of Wefunder followers, endorsements, ratings by users, and/or profile completeness. This algorithm CANNOT make good investment decisions. That's what some humans can do.
Companies are visible on the Explore page once they've raised $5,000.
Think about it from the investor's perspective: you're looking for investment opportunities and find a cool-looking company. But, there's a big fat $0 on the profile – they haven't raised any money yet. Would you invest? Or would you wait until a person who actually knows the founder invests first?
So, hop on the phone, tap into your network, and raise $5,000. Once you do, you'll automatically show up on the Explore page with some traction to show potential investors.
We lock company profiles after they start fundraising. We must do a compliance review on all changes to make sure they comply with the law.
But, life happens, and sometimes you need to change your profile. Send us an email at firstname.lastname@example.org and we can help you out.
No. That would be unethical. It's also illegal. Every company that has ever asked us this question has looked super scammy.
You are allowed to promote if you use Regulation Crowdfunding, Regulation D Rule 506(c), or Regulation A+.
You are not allowed to advertise if you use Regulation D, Rule 506(b).
For Regulation Crowdfunding, you are only allowed to promote after your Form C is filed with the SEC. Oh, and never say the SEC has "approved" your offering. The SEC doesn't like that.
You are allowed to advertise any way you like - email, Facebook, shouting off the rooftops – whatever. However, all your advertisements must be limited to factual information (i.e. avoid saying you have the "best" cupcake shop in the world). Also, by law, all of your advertisements must include a link to your Wefunder profile.
If you haven't filed your Form C, you can ask people to "follow" your profile to show their support, but you cannot say something like: "We are going to fundraise on May 16th." Or: "As soon as we file with the SEC, we'll be raising at a $4 million valuation."
Check out the Legal Primer for more info.
For Regulation Crowdfunding, you are allowed to talk to the public about the facts of your business or products if you do not mention the terms of your fundraise.
The SEC's final rules on Regulation Crowdfunding are clear on this point:
In addition, the final rules do not restrict an issuer’s ability to communicate other information that might occur in the ordinary course of its operations and that does not refer to the terms of the offering.
If a stranger walks into your store and chats you up about investing, feel free to answer their questions about your business. Don't say non-factual things like: "We're the best cupcake shop in the world and we're gonna be HUGE!"
If they ask about terms of the offering, you must point them to your Wefunder profile, and they can only make an investment through Wefunder. You cannot accept money on their behalf.
For "Demo Days," you can mention you are on Wefunder during your presentation if you keep your presentation limited to facts and say nothing about the terms. Most credible demo days – such as those organized by Techstars or Y Combinator – already do not let their participants mention they are selling securities (or the terms of their offering) so as to not be deemed a "general solicitation" of securities that is forbidden for most Regulation D offerings.
That same rule applies for conferences. You may mention you are on Wefunder if you limit your discussion about your business to facts and do not mention the terms.
The key to a successful fundraise is managing momentum. The faster the investments come in, the more new investors will want to invest. Well-managed campaigns raise 30% of their total funding in the first week and 30% in the last week.
The most important thing you can do is to plan a big first day. That "pop" can spark the entire fundraise.
Prepare a list of all the people who are love what you are doing. Do you have any friends? Ask them to get ready. Have a mailing list of customers? Write an authentic personal email to them. Is this press-worthy? Don't hire a PR firm – instead write personal emails to reporters who cover similar topics.
It's also good to plan to start your fundraise when you know you'll have a bunch news-worthy updates coming out. Expect to sign up a key client soon? That'll be a great update to share with potential investors in week #2.
Every Thursday morning, we send a newsletter to over 100,000 investors.
The law requires that we have "objective standards" for which companies are included in the newsletter. This means we can't include you just because we like you. Instead, we have a series of inflexible rules:
New Startups. Those who raised over $20K.
Closing This Week. Those closing their campaigns within 7 days of the newsletter release.
Approaching Goal. Those 70%+ of the way towards their minimum goal.
Special News. Those who signed a 50k+ investment or contract.
- Top 5 Most Raised. Those who raised the most in the past 7 days.
- New Startups. Those who raised over $20K.
After You Raise
- How do I close my campaign?
- What if my campaign fails?
- What happens if a material change occurs?
- Can I extend my funding deadline?
- Will investors contact me directly?
- How do I update investors?
- What updates will investors expect?
- Do I need to file an annual report?
- Is it free to use Wefunder after my fundraise?
After your funding target has been met and at least 21 days have passed, you may initiate the close of your campaign at any time.
After you decide to close your campaign, investors are given a five-day warning. They are given one last chance to cancel their investment and request a refund.
Unfortunately, if your campaign fails, you won't be able to run a new campaign on Wefunder for the same company unless you can demonstrate that you've reached a significant milestone. This could be customer growth, the addition of new distribution channels, the addition of new products, or more.
If a material change in your business has occurred during your fundraise, you must disclose it to your investors before you close the round. All investors must then reconfirm their investment.
A material change is anything a reasonable person would think should be disclosed to investors because they might change their mind. Some examples could be your co-founder quitting, the big deal you bragged about falling through, or an unexpected drop in sales.
Yes. However, this is a material change that requires all of your investors to reconfirm their investment. Still, it's often a better option than failing.
No. We don't hand out your email addresses or phone numbers. All communications with investors are handled on your company feed.
On your dashboard, and through this direct link, you can find a form to send updates to the Wefunder community. This is often the only communication your investors have with you, so you should update this space at least once a quarter with updates and progress. Not all of these updates need to be long or serious – even just posting a few photos or paragraphs detailing the new cool thing your company is doing will show investors that you're using their money to help move your company along.
You should update your investors often enough to make them feel involved in what you are doing. The better they feel, the more likely they are to help when they can. We really encourage you to take advantage of your large investor base on Wefunder.
Unlike public companies, updates are not required by law, but it's nice to let your investors know about your growth, sales, new partnerships, hires, and the other things going on at the company.
We recommend you update your investors at least once a quarter.
If you complete a successful Regulation Crowdfunding offering, you’ll need to file a report once a year to update the SEC and your investors. The report highlights your accomplishments over the last year and details your future plans. You’ll also need to include updated financial statements. The financial statements do not need to be audited or CPA reviewed, but they need to include notes and be certified accurate by the principle executive officer.
The annual report, or Form C-AR, is due no later than 120 days after the end of the fiscal year as indicated by the financial statements in the original offering.
It can be intimidating, but Wefunder has an easy and free tool to help you through the process! When the time comes, we’ll send you a reminder email with the tool and instructions.
This might sound like a pain that you want to just ignore. But, don’t do that! If you neglect to file an annual report, you won’t be able to raise future Regulation Crowdfunding rounds until you file the annual report. However, you may still raise funds from accredited investors only using Regulation D.
Different companies have different reporting requirements:
If your company was dissolved, if you’ve liquidated all your shares, or if you’ve repurchased all issued shares, you do not need to file an annual report.
If you have fewer than 300 shareholders, you only need to file one annual report. Then you’re off the hook!
If you have more than 300 shareholders but less than $10 million in assets, you need to file three annual reports before you are exempt.
If you don’t meet any of those requirements, then tough cookie, you need to keep filing annual reports. But fret not, our tool will be there to the rescue!
Yes. It's free to continue to use our platform to communicate with your investors.
- How do I change my password?
- I forgot my password.
- I’m a founder. Why do I need an investor account?
- I get too many emails. Can I unsubscribe?
- How do I complete my investor account?
To change your password, go to wefunder.com/settings. Choose Password from the left-hand menu to create a new 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.
A law passed on May 16, 2016 that allows anyone to invest in private companies. Only accredited investors were able to do so prior to this day.
Since anyone can now invest in startups and small businesses, we require all of our users to open an investor account. You don’t have to invest but everyone is an investor!
To unsubscribe from Wefunder emails, go to wefunder.com/settings. Choose Notifications from the left-hand menu. You can then pick and choose which emails you want to receive.
Fill in all the information on your investor profile.