This is something that distinguishes the former from the latter in the crowdfunding world:
What happens if a business that offered term or revenue sharing notes misses a monthly payment?
If a business misses a payment or makes a lower payment than what is contractually required, it will be charged a late fee and required to make up the payment according to the terms set forth in the note purchase agreement. Investors will be notified if a business is late in making its payment. Late payments are not necessarily an indication of how a business is doing.
If the business is unable to get back on track by the next payment cycle, it may be in default. If a business is in default, then NextSeed will take additional steps on behalf of investors as described below. What happens if a business defaults on its note?
If a business has an event of default, it will be sent a Notice of Default and investors will be notified at that time. Please note that NextSeed may not be in a position to discuss ongoing negotiations or potential legal action. To the extent possible, investors will be updated along the way with any meaningful milestones that are achieved during the process.
NextSeed, as collateral agent on behalf of investors, will work with the business to determine the course of action likely to result in the most beneficial outcome for investors. This may include delaying formal legal proceedings so the business can get back on track, or providing assistance to the issuer with selling the business or refinancing its debt. If it is determined that formal legal action must be taken, NextSeed will initiate such action on behalf of investors. Legal proceedings may be lengthy and we will update investors with any substantial progress made during this time.
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 316 startups
Wefunder Advisors LLC
for 105 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).
Join 498,761 investors who funded 403 startups with over $144.5 million1
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Wefunder Portal LLC.
Wefunder Inc. runs wefunder.com and is the parent company of Wefunder Advisors LLC and Wefunder Portal LLC. Wefunder Advisors is an exempt reporting adviser that advises SPVs used in Reg D offerings. Wefunder Portal is a funding portal (CRD #283503) that operates sections of wefunder.com where some Regulation Crowdfunding offerings are made.
Wefunder, Inc. operates sections of wefunder.com where some Regulation D and A offerings are made. Wefunder, Inc. is not regulated as either a broker-dealer or funding portal and is not a member of FINRA.
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