- Which offerings am I legally allowed to invest in?
- What’s an accredited investor?
- How much am I allowed to invest?
- Can I invest if I don't live in the United States?
- Can I invest via an entity?
- Can I invest via an IRA?
- Can I add a spouse or beneficiary to my investment?
- A company is citing one of the “SEC’s Temporary Amendments” in their financial disclosures section... What the heck does this mean?
It depends on whether you’re an accredited or non-accredited investor. If you’re accredited, you can participate in all security offers. If you are non-accredited, you can invest in Reg A+ and Reg CF offers.
Accredited investors are wealthy people: typically, they make over $200,000 per year ($300,000 if joint with spouse) or have over $1 million in assets, minus their home.
To find out your investment limits, open an investor account.
It's complicated. Thankfully, when you sign up for a Wefunder account, we'll do all these calculations for you.
The amount you are legally allowed to invest depends on which Regulation the company uses to fundraise.
For Regulation Crowdfunding offerings, Wefunder calculates your annual investment limit based on the net worth and income provided upon account opening. Investment limits are for every 12 month period. Every investment in a Regulation Crowdfunding offering counts towards the annual limit. We will not let you invest more than this amount. The SEC made it pretty complicated to calculate this number, but if you're curious:
Everyone can invest at least $2,200
If either your net worth or income is below $107k, you may legally invest a maximum of 5% of the lesser number.
If both your net worth and income are above $107k, you may legally invest a maximum of 10% of the lesser number.
No one may invest more than $107,000. Accredited investors are subject to the same investment limitations as everyone else, no matter how silly that is.
For Regulation A+ offerings, unaccredited investors can invest up to 10% of income or net worth per year, whichever is greater.
For Regulation D offerings, only accredited investors may invest, and they have no limits.
We have investors from all around the world! With a few exceptions, we accept investments from international investors, as long as you represent that you are complying with the law in your country.
The only exceptions are the Provinces of Quebec, Ontario and Alberta which have requested that we bar their residents from investing.
Yes, you can invest via an entity.
After you click the green Invest button on the company's profile page, you'll get to your investment confirmation page. Under Personal Info, you can add an entity to link to your Wefunder account.
Unfortunately, we do not offer joint investments. Each contract must be between the individual investor and the founder of the company receiving the investment.
A company is citing one of the “SEC’s Temporary Amendments” in their financial disclosures section... What the heck does this mean?
Due to the impact of COVID on small business, the SEC issued a temporary relief order with a few amendments meant to ease the process for companies looking to raise. You can read the full order here, if you’re curious. Some of these amendments center on how a company must go about disclosing its finances.
Here were the pre-existing guidelines:
- A company intending to raise up to $107k had to produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer.
- A company intending to raise more than $107k had to produce CPA-reviewed statements.
Here’s what the temporary relief order changes (note that these changes only apply if a company has been incorporated for at least 6 months):
- A company intending to raise up to $250k can produce 2 years of GAAP (Generally Accepted Accounting Principles) statements certified by its principal executive officer.
- A company intending to raise more than $250k must produce CPA-reviewed statements.
- A company can file a Form C (read: launch a campaign) without any financial statements, provided they’re added in prior to the company accepting investments. Basically, this means that every company must disclose financials to actually accept any money from investors but some companies are exempt from including their financial info when initially filing their offering.