2 min read Wefunder is a platform used by startup founders to source and manage investors. The platform gives the startup visibility and provides ease of access to fundraising metrics and contacts. Read on below to learn the basics of fundraising with Wefunder.
What is the minimum investment on a Wefunder campaign?
Investors can choose to invest any amount between ($100 unless set higher by the founder) and the investor limit per year set by the SEC ($2,200). The average investment on Wefunder is $250, so founders should anticipate pretty small investment amounts.
The investor you designate as the lead investor will typically invest 5% of the round. If you are raising 500K, hopefully, the lead investor is putting in at least 25K as that lead investor is voting for the shares of the investors to follow.
What is the fee structure at Wefunder?
Founders pay a fixed fee of 7.5% of the amount raised. So, if you raise a million dollars, the platform keeps 75K and sends you 925K. There arent any additional fees, including no fixed fees to launch a campaign.
What deal structures can you use on Wefunder?
There are several deal structures available to choose from on Wefunder priced rounds, straight equity price rounds, convertible notes, SAFEs, straight debt deals, and an instrument called a revenue share where companies are paying investors back in multiple on their investment as a percentage of their revenue.
Does Wefunder require exclusivity to a fundraise campaign?
Wefunder does not require exclusivity to a fundraise campaign. The platform does recommend streamlining your fundraising through the platform as it is simpler for the founder to keep track of investors and incoming funds. As a result, this feeds into their algorithm which is looking at investment velocity. However, it is only the investments made through their platform. The more investment velocity you have, the higher you will list in their rankings which comes with many advantages. Note if you bring an outside funder to the platform, Wefunder will waive the 7.5% fee.
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Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: email@example.com