What's the TLDR?
Wefunder has partnered with XX to help make Regulation Crowdfunding much better for founders.
One Line on Cap Table. When you raise on Wefunder, your cap table only has one entry: XX Investments LLC.
Wefunder investors never directly hold your shares. XX Investments LLC is an SEC-registered transfer agent that serves as a custodian. The custodian holds all of the securities in "street name" on behalf of your investors.This means your investors do not actually possess any shares, convertible notes, or SAFEs in your company. Instead, the custodian holds them on behalf of your investors. The custodian signs any documents on their behalf, as directed by your Lead Investor.
Your Lead Investor is the only signature you need. To raise on Wefunder, you must choose a Lead Investor who invests on the same terms. If you don't already have a Lead Investor, we can introduce you to an XX Partner. Your Lead Investor is the only signature you need to authorize corporate actions like converting a SAFE or note, initiating a follow-on financing, or getting acquired.
XX Partners Are Ready to Help. In addition to your lead investor, XX will help your company grow. Your Lead Investor and XX are compensated by Wefunder investors to help your company succeed. The XX receives 10% of any profits that Wefunder investors earn on their investment (such as when you get acquired or IPO), and shares it with those help.
- It's the same outcome as an SPV and a Syndicate Lead. From the standpoint of startup founders, this works like an SPV and Syndicate Lead like on AngelList, except the legal structure is not a fund. When using Wefunder, your company will have one line on your cap table, a single Lead Investor you choose to sign any corporate documents, and a network of mentors you can call upon for help.