The Fundraising Playbook by Wefunder (2024)

FAQs

Do you make money from Wefunder? ›

If you invest through a WeFund, you will hold an interest in the WeFund instead of holding the company's securities directly. We will manage and sell the company's securities on your behalf, and distribute any proceeds to you upon such a sale.

Yes. You can change your mind anytime up until 48 hours before your funds are transferred to the company that you are investing in and you will receive a full refund, including any fees.

Reach beyond your personal network using social media, ads, Wefunder's marketing perks, and other promotions. Aim to reach over 65% of your funding goal before moving into your Closing phase.

It's free to create a company profile on Wefunder.

For Reg CF, Wefunder charges only 7.9% of the total raise if successful. For instance, if a company raises $100,000, we charge $7,900 upon close. We charge no upfront fees. After the successful raise, a company can choose to file their annual report with us for $500.

Yes, countless people have been successful with crowdfunding, dating back thousands of years to the earliest concepts of capitalism.

We know you might be hesitant to provide this information, but we guard your SSN like our life depends on it. We encrypt and store Social Security Numbers (SSNs) on a separate group of servers from wefunder.com.

For payments made by bank ACH, wires, or checks, Wefunder charges investors a transaction fee of 2%, with a minimum of $8 and a max of $150. For credit cards, Apple Pay, or Google Pay, Wefunder charges a 5.5% fee + $2, with a minimum of $10 and no maximum - per transaction.

We take the security of your information very seriously. The information you provide is sent via secure API to Onfido, a trusted and widely used service provider. You can read about Wefunder's privacy policy here. For more information, please also see the privacy policy for Onfido.

Microlending platforms such as LendingClub and Prosper allow for crowdfunded debt financing where, instead of owning part of the company, as with some forms of debt crowdfunding, you become a creditor and receive regular interest payments until the loan is repaid.

Some of the more basic funds have minimums as low as $10, but for platforms that connect investors with individual real estate deals, minimums can range between $5,000 and $200,000, with $25,000 being a commonly used minimum investment amount.

Are crowdfunding investments worth it? ›

Startups and early-stage ventures can and do fail, and you could lose your entire investment. In addition, crowdfunding investments carry liquidity risks, as you'll be limited in your ability to resell your investment for the first year—and you might need to hold your investment indefinitely.

Crowdfunding takes a lot of preparation.

Make sure you do your due diligence in running ads, compiling emails, and gaining exposure of your project prior to the launch. This means that there is going to be a cost in running a proper crowdfunding campaign.

As of July 2022, Wefunder has helped 2000+ founders raise over $500 million. Over 500,000 people have invested on Wefunder, with a median investment of $250.

Some might offer a fixed dividend per share per year. Some might offer a percentage of profits. A common scenario is also to "swap" the dividend after your investment is repaid. For instance, a brewery might share 80% of its profits until the investors are repaid, and then 20% thereafter in perpetuity.

The majority of crowdfunding research focuses on investments in the form of purchasing shares in startups, estimating the average returns on such equity-based investments at 7% to 8%.

Depending on the type of crowdfunding, investors either donate money altruistically or get rewards such as equity in the company that raised the money.

In return, crowdfunding platforms are expected to provide a secure and easy to use service. Many platforms operate an all-or-nothing funding model. This means that if you reach your target you get the money and if you don't, everybody gets their money back – no hard feelings and no financial loss.

While no investment is without risk, Wefunder appears is a legitimate platform and investment option. As always, due diligence from the investor's end is critical. So if you're contemplating investing through Wefunder, it's safe to say that concerns of it being a scam can largely be put to rest.