Due to a recent change in securities laws, Wefunder is now allowed to present private investment opportunities to the general public. For 506(c) offerings, Wefunder may only accept investments from accredited investors, and must take reasonable steps to verify that all investors are, in fact, accredited investors. Wefunder takes this requirement very seriously. To that end, we use a robust process to verify each investor’s accredited status, and regularly review the process to ensure that it remains effective. Wefunder’s verification and review processes are described below.
Wefunder’s verification process begins when a potential investor registers on our website. Each potential investor must answer questions during registration regarding his or her income and net worth, including a certification as to the investor’s expectations regarding income for the current year. Wefunder uses this information to establish an expectation that the investor is an accredited investor. For investors whose representations indicate accredited status, Wefunder immediately seeks to verify the investor’s accredited status and inform the investor of the result within 48 hours.
First, Wefunder verifies the investor’s identity using a third-party identity verification service. Wefunder then asks the investor to upload additional information to verify his or her accredited status. The additional information may include, for example, a letter from the investor’s lawyer, registered financial adviser, certified public accountant, or registered broker/dealer indicating that such individual or entity has determined that the investor is an accredited investor using reasonable steps within the prior three months. The additional information may include tax returns, W2's, bank or securities account statements, a credit report, and a representation that the investor has disclosed all liabilities necessary to make a determination of net worth. A Wefunder employee then manually reviews the additional information to determine whether the investor is accredited.
In a very small percentage of cases, with famously wealthy business celebrities, a Wefunder employee may manually verify their accredited status by obtaining public information available on the Internet. For instance, if Mark Zuckerberg or Larry Page applied to invest on Wefunder, Wefunder will verify their accredited status by documenting screenshots of publicly available information that verifies their income or net worth.
Wefunder periodically reviews its own verification process for verifying an investor’s accredited status to ensure it is reasonable. Wefunder reviews its own process by conducting internal audits and testing a random sample of non-IRS verified accredited investors against the IRS database (again, provided that the investors have authorized Wefunder to review their tax returns). Throughout the verification process, Wefunder maintains a detailed record of the process used to verify that each investor is an accredited investor.
790 startups have raised $336,019,626 on Wefunder
Wefunder supports three different federal laws that allow startups to raise money legally. To comply with the law, Wefunder Advisors LLC and Wefunder Portal LLC (both owned by Wefunder Inc) also list startups depending on the regulation used.
Legal May 16th 2016
Wefunder Portal LLC
for 697 startups
Wefunder Advisors LLC
for 162 startups
for 3 startups
Curious how well the companies have done? Or how many raised follow-on financing?
Some fine print: 1) These numbers include startups currently live on Wefunder if they pass their minimum target. 2) Some startups use two different laws at the same time (i.e., Regulation D and Regulation Crowdfunding).
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wefunder.com is a website owned by Wefunder Inc., the parent company of Wefunder Advisors LLC and Wefunder Portal LLC. Wefunder Inc. operates sections of wefunder.com where certain Regulation D and Regulation A+ offerings are available. Wefunder Inc. is not regulated in any capacity, is not registered as either a broker-dealer or funding portal, and is not a member of FINRA or any other self-regulatory organization.
Wefunder Advisors is an exempt reporting adviser that makes filings with the SEC and certain states. Wefunder Advisors advises special purpose vehicles (SPVs) used in certain Regulation D offerings that are available on wefunder.com.
Wefunder Portal is a funding portal (CRD #283503) that is registered with the SEC and is a member of FINRA. Wefunder Portal operates sections of wefunder.com where certain Regulation Crowdfunding offerings are available.