Startups On The VC Track: A Look At Wefunder's Equity Crowdfunding Platform

Wefunder is the offspring of venture capital and crowdfunding. Wefunder facilitates raising money via crowdfunding from a broad range of backers, including those without traditional investment credentials.

That's because, unlike venture capital, you don't have to make cold calls or email individual investors to raise money through their platform. Interested? What is Wefunder? How does it work? How can you know whether it's a suitable fit for the capital your business needs? All these questions and more will be answered in this review.

Wefunder Works Best For Companies With A Fanbase

Wefunder only works with firms that are getting started or high-growth companies already on their third round of VC investment. Instead, it looks for a niche between well-received businesses and those with exponential growth potential.

Because the majority of the crowdfunding on Wefunder is equity-based, giving investors a stake in the company they help support. For equity crowdsourcing to be fruitful, a company must be well-established enough to attract investors yet still young enough to provide substantial growth potential.

If you fit the description, you may find a reliable partner on Wefunder. The average successful campaign earns $320,0001, much more than on other crowdfunding platforms like Kickstarter or GoFundMe.

In addition, Wefunder provides support in legal documentation, investor relations, and mentoring. Does that satisfy you? So let's take a closer look at Wefunder to determine whether it's a good fit for your business.

Various Types Of Businesses

In particular, Wefunder facilitates equity crowdfunding. Investors provide capital in exchange for a stake in the company. They have a minor stake in the firm and are thus entitled to future financial rewards, such as dividends or proceeds from an acquisition. To put it simply, certain companies will have more success than others on Wefunder.

Wefunder is technically open to companies in any sector. In reality, however, few backers would contribute to a campaign to crowdfund a law firm or advertising firm. They want to hear about the next Warby Parker, Snapchat, or Netflix, which means they're searching for a novel, attention-grabbing concepts.

Again, they are banking on your company's continued success to pay off for them. Even said, not every company seeking funding on Wefunder is a "tech startup" or even trying to market something particularly novel.

Prospective Financiers

You should also consider if you have any investors lined up. Again, these need not be accredited investors; relatives, friends, and current customers are OK. If you want to be successful on Wefunder, you will need investors for your small business.

Wefunder believes that only 50% of investors in a typical successful campaign come through the Wefunder platform. People who were already familiar with the firm had been sent an invitation to invest.

Economic Situation

Money matters, too, when it comes to the success of your business. Repeatedly, we've stressed the importance of having a firm with growth potential for investors. Investors will look for proof of a successful track record and financial security before putting money into a firm.

Remember that they invest in the business, not the goods it produces. To attract investors, you must also be transparent about your financial situation. Simply saying that things are "excellent" is not adequate. The laws for equity crowdfunding stipulate that you must give investors complete financial details.

Investment Expertise

At the end of the day, if you want to obtain investment on Wefunder, you need to know the ins and outs of startup investing. You can have experience with Silicon Valley venture capital to be qualified. However, you should be aware of the hazards involved in giving up stock in your firm, as well as what the SEC expects of organizations seeking investment money.

Budgeting With Wefunder: Pricing and Expenses

Seeing that you're still reading, we'll assume you're hopeful that Wefunder may be a good fit for your business. I would like to know how much this crowdfunding site will set me back. And if you don't get the money you need, absolutely zero. Sign up and launch your campaign with no initial investment.

Instead, successful campaigns incur a platform fee from Wefunder. Therefore, 7.5% of your total earnings will be required to reach that fundraising objective. These costs cover all that you need. Payment processing fees are included in the overall price.

Part Of Your Campaign

What do you receive for your platform cost? More than you would get from most crowdfunding sites. Wefunder provides a surprisingly large quantity of resources for company owners.

Wefunder will review your campaign and offer suggestions as you develop it. Then, once your campaign is up and running, Wefunder will assist you in spreading the word. After receiving funding from Wefunder, you will have access to investor yearly report software.