WeFunder is one of the top equity crowdfunding websites out there!
In my article covering crowdfunding statistics, I outlined how they comprised 40% of the initial 100 Reg CF campaigns.
It’s crystal clear that this equity crowdfunding platform is leading the pack when it comes to Regulation Crowdfunding campaigns.
With this blog post, I want to get into pros and cons of using their website, along with some of the statistics and information that you might not be familiar with.
If you’re entrepreneur or startup founder, then I’m sure you’ve seen some of the different funding portals that are out there and might be wondering… is WeFunder a good fit for you?
My goal is to answer that question (and also have you reach out to me when you launch).
Success Metrics and Funding Progress
One year into the enactment of Reg CF, WeFunder was responsible for $18 million in terms of their funding volume. This makes them the leader of the pack for Reg CF.
The company has also put together their own statistics when it comes to the companies that have raised money on their platform. According to the website, more than $50 million has been transacted at the time of writing.
More than 182 companies have raised money under Reg CF on the platform and there have been more than 60,000 investments that have been made.
It’s evident that WeFunder has done very well with Reg CF, though they haven’t seen the same level of success with other funding structures like Reg A+ and Reg D. According to the company website, 73% of the startups that launched campaigns were successfully funded.
Personally, I am a tad bit skeptical of their numbers. The reason is that while they say they’ve done $55, 532,046 in Reg CF offerings at the top of their stats page, they also say that they did $32,837,543 in Total Reg CF Commitments. I’ll have to ask them about that.
Regardless, even when taken in the content of independent sources, the data is clear that they’re leading the pack with Reg CF.
Cost Structure and Fees
The fees that come with using WeFunder are going to vary depending on the type of funding you’re doing. Basically, this refers to the regulation of the Jobs Act that you’re using.
- Regulation Crowdfunding (Title III): Investors will be charged up to 2% of their investment minimum and companies will be charged up to 7% of their total funding amount.
- Regulation A+: There are no fees to do a Regulation A+ campaign on WeFunder.
- Regulation D: The website will charge up to 20% of carried interest, which is basically a share of the future profits from the financial raise. When the startup experiences a liquidation event, like an acquisition or an IPO, WeFunder will get a portion of those funds.
As you can see, the costs that you experience as a startup company are going to vary. This is true across other crowdfunding platforms as well. WeFunder also charges a $195 fee before your campaign goes live.
A Special $1,000 Discount Offer
If you’re interested in using WeFunder to conduct your equity crowdfunding campaign, then I’m going to hook you up with a massive $1,000 discount!
When your fundraising campaign closes, you’ll get $1,000 off WeFunder’s fundraising fees. You just gotta use this special link to set up your campaign.
After you click through, you just gotta fill out your company information, get everything sorted out, file your Form C, and then you’re ready to go!
This is an affiliate link.
WeFunder Investing Requirements
The great thing about WeFunder is that it’s open to both accredited and non-accredited investors! Unless the startup is doing a Reg D raise, you’ll be able to invest in the companies on this platform.
The amount of money that you’ll be able to invest will vary depending on the regulations that the startup is using to raise money. For example, under regulation crowdfunding, everyone can invest at least $2,200. If your net worth or income are above $107k, you can invest a maximum of 10% of the lesser number.
Finally, both US and International investors are allowed to participate on this platform. You can learn more about these common questions here.
Downsides of Using WeFunder
While there are many benefits, I also think there are tons of downsides to using WeFunder. For one thing, if you’re doing a Reg D offering, you’re giving away a ton of equity to the platform when you sell your company or go public.
Second of all, you’re giving away a good chunk of your financial raise when using their platform under Regulation CF. You also gotta pay a fee before it goes live. It’s pretty common knowledge that you can’t only rely on the investors in their marketplace. You also gotta promote your own project. You gotta invest in a marketing and PR campaign for our offering.
I think WeFunder is offering a lot when it comes to the functionality, ease-of-use, and how they help you with the contracts related to an equity crowdfunding raise.
The question is… how much are you gonna raise? If you end up raising $300k under Reg CF on WeFunder, you’re going to be paying $21,000 in fees for this functionality and marketplace. It’s up to you to weigh the financial decision.
