Trend 2: It’s becoming easier and easier to invest in a company.
Changes in legislation (and companies like Wefunder) are removing roadblocks which have previously prevented non-Rich humans from investing in startups. As it becomes less expensive to invest, angel investing has become more mainstream.
Check out the entire tale if you’re curious about how a little bill about Regulation Crowdfunding became federal law in 2012.
Trend 3: More investments means less time to liquidity.
As angel investing becomes easier, new companies grow more quickly. This means companies experience “liquidity events” (being bought by another company or starting to sell stock publicly) much sooner than in the past.
Convertible notes make fundraising easier & less expensive for startups.
In the past, equity was the main trading point with startups. Recently, investing methods like SAFE notes and other convertible notes have become more popular. These make angel investing simpler and less expensive for both parties, removing many of the old barriers to getting capital into founders’ hands.
New platforms have emerged that change how we invest entirely– some focus on democratizing angel investing and others on an early product onboarding model. These platforms include Indiegogo, WeFunder, AngelList, and Kickstarter.
New policies have worked in favor of crowdfunding.
The 2012 JOBS Act prompted massive changes– venture funds became exempt from excessively heavy government regulation. Through other policies, we’ve gained general solicitation benefits and crowdfunding benefits which have helped keep investing simple and easy.
Head over to Wefunder’s legal primer for the full lowdown on the types of exemptions the JOBS Act granted.
Tokens are basically meant to build trust between a network of people online– they’re meant to encourage good behavior monetarily. Cryptocurrency is an extremely hot but extremely new playing field. This means it’s changing rapidly– be careful and read up if you want to dip your toes.
These trends will determine the future of investing.
As startups and angel investing evolve, we continue to see the search for liquidity– we see this now with tokens and secondary trading. Platforms, seed funds, and legal automation allow companies to form and raise money faster and easier than ever before. Meanwhile, regulations, tokens, politics, and education are making it logistically easier for anyone to invest.
Keeping an eye on these trends is your crystal ball into the future of angel investing.
Aaron gives the full rundown on what it means to be a “good investor.” (Luckily, it turns out that being a good human as you invest will bring good things your way :)
In March of 2018, something big happened: the best startup investor on the planet shared its entire playbook. This investor also happens to be the world’s most famous startup accelerator, Y Combinator. From Airbnb to Doordash to Dropbox to Stripe, YC has funded many of the biggest
startups you can name.
We wanted to put YC’s Startup Investor School videos right at the fingertips of our favorite people out there, Wefunder investors. To that end, we put in some crowdfunding and Wefunder-specific tid-bits, too.
While we are a YC Alum, Wefunder has no current affiliation with Y Combinator. So, many thanks to Y Combinator for all of the video material used on this page! They produced and own all of these wonderful videos while we wrote the summaries.
1,486 startups have raised $633,206,448 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 1289 startups
Wefunder Advisors LLC
for 304 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).