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How are XX and the Lead compensated?

Investors pay 10% of any of their profits on their investment to the XX team. The 10% fee only applies to the profits earned by investors - such as during an acquisition, IPO, or secondary trade.

It works similar to carried interest. For example, if you invested $1000, and you later sold your shares for $10,000, you would keep $9100 while XX earns $900.

XX then shares these profits with the Lead Investor and any other member of the XX who may help the company with office hours, connections, or advice. Typically, a Lead Investor receives 50% of the profits received by XX.

The XX fee is not paid to Wefunder (or any of its affiliates), but to XX. The XX team are incentivized to help the company succeed and grow, and are only paid if they are successful and investors earn a profit.

The Lead Investor may also earn 5% carried interest from any SPVs we may form to invest in the company during follow-on financings.  If you are legally eligible to invest in these financings as an accredited investor, you will get first right to invest up to your pro-rata share.  

In addition, Wefunder Inc pays the XX team an annual cash fee to help mentor startups in our portfolio.