If the Fund has greater than 95 investors, it is regulated as a full-fledged mutual fund, which would dramatically increase costs and make the fund impractical as an investment vehicle.

We place priority on investors who invest high amounts early, but make exceptions for those who can help the portfolio that the Fund invests in.

First, Fund Managers must personally invest at least 10% of the capital that the Fund invests, on the same terms. It can be any single manager with conviction (we believe investing by committees leads to poorer decisions) or any combination of the team.

Second, the crowd (composed of the friends, customers, and users of the company) matches the Fund commitment. We believe that business that have their customers and friends invest are less likely to fail. However, Wefunder Advisors may waive this requirement in special circumstances.

Wefunder Advisors then approves the Fund Investment after conducting compliance and anti-fraud checks.

When investing in earlier stage companies, the team of Fund Managers will negotiate valuations based on their experience in the industry.

When investing in later-stage companies, they will often match the valuation and terms set by larger seed funds and venture capitalists.

Equity investments in startups have a very long term horizon. It typically takes 3-10 years for a successful company to have a liquidity event, when it either gets acquired or has an IPO.

Some Funds may invest in main street businesses with annual dividends or revenue share repayments. If this is the case, it will be noted in the investment target description.

For equity deals, we disperse funds to investors when any company has a liquidity event, once per year on May 30th.

If the fund invests in businesses that offer a dividend or share of revenue, those funds will be dispersed once per year on May 30th.

The Fund charges 20% carried interest and a 2% management fee. This is the standard fee for venture capital and private equity funds.

Wefunder retains 5% of the 20% carried interest.

The remainder of the compensation is used to incentivize a group of domain experts to scout out good companies, conduct due diligence on them, and mentor to help them succeed.

After you invest in the fund, there will be no further capital calls.

Yes, but only for 48 hours.

Otherwise, you can cancel anytime only when a Fund is pre-launch, when we are still recruiting a team of experts. If you make a commitment, you will recieve a 5 day notice when this period ends (along with the bios of the experts chosen).

No. This is not a mutual fund. All capital will be invested in private companies in long-term, illiquid investments.

The Fund is expected to make between 10 to 20 investments.

No. You can't opt out of any individual investment that the fund makes.

Yes. In most cases, a company will list a campaign on Wefunder, where you may make an additional direct investment, in addition to your exposure through the Fund. To help you make this decision, you will also recieve the report card summarizing the diligence that the fund managers compiled.

The fund managers will typically negotiate an "early bird perk" where the fund (and the backers) can invest at better terms if they act fast. This is a matter of fairness since the investors in the Fund are paying (in the form of carried interest) for the deal flow and the due diligence that the crowd benefits from.

Fund investors sign:

Operating Agreement, Subscription Agreement, and Disclosure Statement. The agreements were drafted by Cooley and Wilson Sonsini.

Fund most often invest between $25,000 and $100,000.

After each investment is made, you'll be notified of the selection via e-mail, along with a report card.

Most companies on Wefunder are required by law to release an annual report (typically on April 30th) that discloses important items like full GAAP financial statements and a cap table. Here's a actual annual report of one company.

Additionally, once a year by May 30th, we will update the estimated unrealized IRR of your portfolio.

The team of Fund Managers will identify one "lead" investor to manage the investment, including any voting rights. The Lead Investor will have a fudiciary duty to advocate on your behalf to maximize your investment. Wefunder Advisors has ultimate oversight.

In almost all cases, the Fund will only invest if investment contract has voting rights. Further, when the crowd invests in a company, retail investors investing small amounts will most often proxy their voting rights to the Lead Investor.

Fund Managers typically negotiate for pro-rata rights when making larger investments. The Fund will particpate in follow-on opportunities subject to available capital and deal quality. The Fund Managers may also open up a side fund for interested investors.

We're not allowed to offer tax advice. You'll receive a single K-1 from each Fund each year. Your accountant can offer more specific advice.

Yes, if legal in your country. You should check with your lawyer and accountant.

Yes. We can accept investments in a Fund only from those who are an accredited investor. Unfortuantely, it is still illegal for unaccredited investors to invest in venture capital funds.

Yes.

Yes. You can check out our FAQ for more information on risks, returns, different securities, and how startup financing works.