Seed investing is not something for amateurs, in fact frankly I don't think investing in public companies is for amateurs. I would tell ordinary people to invest in index funds and don't invest in startups at all. You should not be investing in startups because you think it is going to change your life. You shouldn't be doing it unless you're rich enough that your life wouldn't be changed by making lots of money. - Paul Graham
"All the small investors (often < $25k) invest in the Crowd Fund, which then invests as one entity in the startup."<p>So your company must create and manage a new investment vehicle for each startup to raise money on Wefunder? I assume so, otherwise the investors in one holding will incur the liability of the fund being sued by the investors/investment of another.<p>According to your FAQ, you are not charging any fees yet and have raised about $500k to support your operations. On top of operating the parent business, for each entity you will have to prepare and send out K1s, make numerous compliance-related and SEC filings, and correctly disburse funds once liquidity arises. As a fund, you'll also possibly have to prepare annual or quarterly mark-to-market valuation reports for your holdings. All told, this could run into the tens of thousands of dollars per entity per year.<p>What happens if your company runs out of money to properly steward the funds you raise? Do you have a strategy to mitigate legal / compliance costs?
I really hope uncapped notes are not allowed. If you look at the history, Dropbox turned a $6M investment into a $5 billion dollar company. Google turned a $25M investment into a $250 billion dollar company. I have a feeling, one of these startups is going to turn a $1M uncapped investment into a $1B company, and there are going to be some really hurt feelings. Someone is going to invest $1000 in the next Google/Dropbox/AirBnB and walk away with $1200.
This looks great -- nice to see more options for individuals to invest. I don't think you should ever be convincing someone to invest in startups, but I was actually looking for a way to invest in microryza, and they used your system.
Lots of new people in this space lately: AngelList via SecondMarket, FundersClub, MicroVentures.<p>I have an investment in a seed fund run by a prominent angel, so I have some insight into recent valuations. I get the feeling that these online investors are getting inferior terms. For example, convertible debt usually comes with a conversion discount and a cap, but the deals I've seen on FundersClub have been missing one or both.
Maybe I'm missing something- but I can't see the valuations the companies are raising at anywhere (e.g. I can see that Company X wants to raise $490,000 - but how much of the business this is for)<p>Surely this is question number 1 when you want to invest in a company?<p>EDIT- Found it once I clicked the "Apply to invest" button". Maybe it should be a bit more up front though
I am not impressed.<p>You are issued stock or a convertible note after your initial investment and you can cannot convert that note till the company is either bought-out or goes public.<p>What if they don't do either and simply reinvest the "profits" back into the company thereby showing no profits?<p>What happens if the board of the directors of the company you invested in dilutes your shares by issuing more-and-more stock to themselves and others year-after-after till your percentage of the company is practically non-existent?
This is interesting. Are the blurred images behind "Mystery YC Company" relevant to the company in any way, or just random backgrounds? The reason I ask is that one of them shows a screenshot for a startup that I know is not a YC company, and I know they aren't raising since they were recently acquired.
Holy crap, this is true visionary...great idea and excellent execution! Hopefully everything goes through on the government-side so that anyone can invest in these startups.<p>Question, though: Is the plan to allow any company to sign up in 2014 or will there still be some moderation in which companies can sign up?
Seems pretty interesting but after I certified for being an investor I got this:<p>Startups Fundraising
Get first access to hot deals. 7 days left.<p>with no start ups listed. It seemed like there were a few presign up...
How are you guys avoiding having to register as a broker dealer before the JOBS act goes into place? (I'm assuming you're applying for Funding Portal status afterwards)
Love the concept, not the name. "Wefunder" comes across as slightly generic with a hint of cheese - the last thing you want as a company specializing in financial investments.<p>Just my 2 cents; some friendly constructive criticism; something to note perhaps in the near future when you are ready to do another brand evaluation.
When I click "certify as an investor" I automatically get directed to sign up for early access, with Facebook.<p>I am hesitant to enter my information, because I don't know what the certification process is like. It would be great if you could add this information somewhere? I highly doubt I qualify so it would be for nothing.
How exactly do accredited investor laws work? If a private company allows a non accredited investor invests to put in $10k in exchange for stock, who broke the law?<p>If this new law comes in, are foreign investors allowed to take part?
Just applied to put $1k into a YC company that I was very impressed with.<p>I hope this becomes the default for YC companies. Fuck the VC's - invite the public to demo day and crowd fund the seed rounds!<p>Quick math: investing $1k into Facebook with the same terms would be worth over $8 million today. For Dropbox, over $600k. For an OMGPOP-sized exit, $25k.