4 ms·

Invest in startups that pitched at YC Demo Day

40 points by npt4279 14y ago

rpicard 14y ago
I find it interesting that they didn't go to great lengths to hide the identities of the "mystery" companies.
- gbelote 14y ago
  Cofounder here. We hide the identities of the companies for regulatory purposes (complying with current general solicitation rules). We can talk about general things, and if you do some light research you can probably figure out who's raising. But we don't blatantly say "Company X is Raising Money".
  - wilfra 14y ago
    In that case, I think it's ok if I share that the companies raising are: Microryza, Goldbely, Zenefits and Strikingly - with Wevorce listed at the top of the page but it says they are 'not currently fundraising'. Conspicuously absent: wefunder >< (if I misinterpreted your post, sorry! and I'd be happy to delete this)
minimaxir 14y ago
Ramen profitable since Oct 2012 That's an odd bullet point. "We make barely enough money and we've been doing it for 5 months!"
jcr 14y ago
If I'm reading things correctly, people who don't qualify as an accredited investor (or prefer not to state) are unable to invest until sometime in this Summer 2013 when the SEC enacts Title III of the JOBS Act. Is this correct?
- npt4279 14y ago
  That is correct. The SEC was told by Congress to implement the entire JOBS Act in January 2013, but they are behind schedule.
  - jcr 14y ago
    Thanks! I think it's just brilliant how wefunder is executing on a fundamental market change (by legislation) so quickly. I remember reading about the JOBS Act, but at the time, I really didn't grap what it meant. You did. Had things gone as dictated by Congress, your currently great situation would be even better.
- niggler 14y ago
  The parts that apply to accredited investors (like hedge funds advertising) are supposed to be in effect come summer, but the parts pertaining to crowdfunding won't be in effect until early 2014 To explain why, Mary Shapiro has left and the new SEC chairwoman Elisse Walter has yet to join the spot. Once she does, SEC has 270 days, which puts us in early 2014.
breck 14y ago
Are there any sites that aren't waiting for the SEC to let unaccredited investors invest? I wonder if there will be a YouTube equivalent in this space: a company that turns a blind eye to unaccredited investors participating, and as a result captures a huge lead in the market. IIRC user submitted illegal content was an early driver of a lot of traffic to YouTube.
- minimaxir 14y ago
  You say that as if YouTube got away scot-free without any hassle or consequence. Viacom made sure there was consequence.
- npt4279 14y ago
  Unfortunately, the consequences are too severe to disregard the law. The threat of SEC action will blow up the financing of any startup that raises money illegally.
- gbelote 14y ago
  You might find something internationally, but in the US there isn't anything on my radar. It's technically possible, we used state law ourselves to dogfood from unaccredited investors, but there are a number of issues that make it too much of a legal headache to be worthwhile. We explored this avenue last fall, and found it to create an adverse selection scenario (i.e. strong companies don't want to deal with it because they can raise money traditionally). Maybe someone will try it, but the issue is that it puts the companies who raise money at risk - not the platform. I'd be skeptical about investing in companies raising money on such platforms, but I have obvious bias - I'm a cofounder of Wefunder. :) However note: once Title III of the JOBS act takes effect, the unaccredited investor landscape will change dramatically.
- niggler 14y ago
  " a company that turns a blind eye to unaccredited investors participating, and as a result captures a huge lead in the market." There's a profound difference between a copyright violation (for which DMCA gives some cover for the site) and a blatant violation of the securities act of 1933
dxhdr 14y ago
A startup for crowd-vesting in startups... Am I the only one that sees this as some kind of signal that the capital markets are hopelessly fubar'd? That perhaps the dollar is turning to garbage faster than we'd like to admit if everyone's lining up to throw thousands after bad ideas in the hopes they'll strike it rich? Is this really a good thing? Or maybe I'm being far too cynical here and crowd-funding is really the road to salvation? I don't like Wall-Street controlling capital any more than the next guy...
- npt4279 14y ago
  We plan to have quality over quantity, so I prefer to see it as democratizing access to investment opportunities. Previously, only the rich even heard about the best investments. We think all Americans should have the opportunity to invest in innovation... as soon as the SEC implements the JOBS Act.
- wilfra 14y ago
  I'm not sure how you are drawing any connection between this and the strength of the dollar or capital markets. As long as there has been money there have been people looking to take risks and turn that money into more money. Gambling, investing and entrepreneurship are all an extension of that. This is all three of those rolled into one, not some conspiracy orchestrated by the Illuminati. Depending on the number of startups who raised this way vs via normal channels, one might draw some conclusions about the angel and VC funding markets and by extension the public equity markets for tech companies - but that's about it.
irollboozers 14y ago
This is going to be such a powerful tool in the future. Any investors who sleep on this are going to miss out because whoever wins this space will be a public company, hands down.
web007 14y ago
I'm all for "crowdfunding" startups, but I don't like the way that WeFunder is going about it in my case. I went through their questionnaire and found out I'm not allowed to invest - fair enough, the rules will get fixed eventually. Then today, I got an email today to say "We have this great investment opportunity! Oh, by the way, screw you because you're not accredited." Until the rules change, don't bother emailing me. Until then it's just a tease, and a little insulting at the same time.
- npt4279 14y ago
  That's my bad. I should have segmented the list to exclude people who were certified as unaccredited. I forgot to do that in the rush of things. I'm sorry for the tease!
joonix 14y ago
Hmm, Wevorce raises some questions. I don't know if their disclaimer about how they are not really a law firm would pass muster. If they are providing legal services, they can't raise funds from non-lawyers.
scottnyc 14y ago
I really like this. However, I don't see anything regarding the terms and valuation which I would invest at. How can one responsibly invest without know what my $1000 actually gets me? If the process is that the valuation will be set once funds are raised and I will have the option to back out at that point - then this needs to be spelled out. Some clarity here is needed.
- npt4279 14y ago
  You're right; we should do a better job of communicating this. Right now, you have to click on the invest button to see the terms, and to further complicate things, many of the startups use the YC VC Fund Note, which delays the setting of the valuation.
plusbryan 14y ago
What's the difference between wefunder and Funders Club?

40 points by npt4279 14y ago

rpicard 14y ago

I find it interesting that they didn't go to great lengths to hide the identities of the "mystery" companies.

gbelote 14y ago
Cofounder here. We hide the identities of the companies for regulatory purposes (complying with current general solicitation rules). We can talk about general things, and if you do some light research you can probably figure out who's raising. But we don't blatantly say "Company X is Raising Money".
- wilfra 14y ago
  In that case, I think it's ok if I share that the companies raising are: Microryza, Goldbely, Zenefits and Strikingly - with Wevorce listed at the top of the page but it says they are 'not currently fundraising'. Conspicuously absent: wefunder >< (if I misinterpreted your post, sorry! and I'd be happy to delete this)

minimaxir 14y ago

Ramen profitable since Oct 2012 That's an odd bullet point. "We make barely enough money and we've been doing it for 5 months!"

jcr 14y ago

If I'm reading things correctly, people who don't qualify as an accredited investor (or prefer not to state) are unable to invest until sometime in this Summer 2013 when the SEC enacts Title III of the JOBS Act. Is this correct?

npt4279 14y ago
That is correct. The SEC was told by Congress to implement the entire JOBS Act in January 2013, but they are behind schedule.
- jcr 14y ago
  Thanks! I think it's just brilliant how wefunder is executing on a fundamental market change (by legislation) so quickly. I remember reading about the JOBS Act, but at the time, I really didn't grap what it meant. You did. Had things gone as dictated by Congress, your currently great situation would be even better.
niggler 14y ago
The parts that apply to accredited investors (like hedge funds advertising) are supposed to be in effect come summer, but the parts pertaining to crowdfunding won't be in effect until early 2014 To explain why, Mary Shapiro has left and the new SEC chairwoman Elisse Walter has yet to join the spot. Once she does, SEC has 270 days, which puts us in early 2014.

breck 14y ago

Are there any sites that aren't waiting for the SEC to let unaccredited investors invest? I wonder if there will be a YouTube equivalent in this space: a company that turns a blind eye to unaccredited investors participating, and as a result captures a huge lead in the market. IIRC user submitted illegal content was an early driver of a lot of traffic to YouTube.

minimaxir 14y ago
You say that as if YouTube got away scot-free without any hassle or consequence. Viacom made sure there was consequence.
npt4279 14y ago
Unfortunately, the consequences are too severe to disregard the law. The threat of SEC action will blow up the financing of any startup that raises money illegally.
gbelote 14y ago
You might find something internationally, but in the US there isn't anything on my radar. It's technically possible, we used state law ourselves to dogfood from unaccredited investors, but there are a number of issues that make it too much of a legal headache to be worthwhile. We explored this avenue last fall, and found it to create an adverse selection scenario (i.e. strong companies don't want to deal with it because they can raise money traditionally). Maybe someone will try it, but the issue is that it puts the companies who raise money at risk - not the platform. I'd be skeptical about investing in companies raising money on such platforms, but I have obvious bias - I'm a cofounder of Wefunder. :) However note: once Title III of the JOBS act takes effect, the unaccredited investor landscape will change dramatically.
niggler 14y ago
" a company that turns a blind eye to unaccredited investors participating, and as a result captures a huge lead in the market." There's a profound difference between a copyright violation (for which DMCA gives some cover for the site) and a blatant violation of the securities act of 1933

dxhdr 14y ago

A startup for crowd-vesting in startups... Am I the only one that sees this as some kind of signal that the capital markets are hopelessly fubar'd? That perhaps the dollar is turning to garbage faster than we'd like to admit if everyone's lining up to throw thousands after bad ideas in the hopes they'll strike it rich? Is this really a good thing? Or maybe I'm being far too cynical here and crowd-funding is really the road to salvation? I don't like Wall-Street controlling capital any more than the next guy...

npt4279 14y ago
We plan to have quality over quantity, so I prefer to see it as democratizing access to investment opportunities. Previously, only the rich even heard about the best investments. We think all Americans should have the opportunity to invest in innovation... as soon as the SEC implements the JOBS Act.
wilfra 14y ago
I'm not sure how you are drawing any connection between this and the strength of the dollar or capital markets. As long as there has been money there have been people looking to take risks and turn that money into more money. Gambling, investing and entrepreneurship are all an extension of that. This is all three of those rolled into one, not some conspiracy orchestrated by the Illuminati. Depending on the number of startups who raised this way vs via normal channels, one might draw some conclusions about the angel and VC funding markets and by extension the public equity markets for tech companies - but that's about it.

irollboozers 14y ago

This is going to be such a powerful tool in the future. Any investors who sleep on this are going to miss out because whoever wins this space will be a public company, hands down.

web007 14y ago

I'm all for "crowdfunding" startups, but I don't like the way that WeFunder is going about it in my case. I went through their questionnaire and found out I'm not allowed to invest - fair enough, the rules will get fixed eventually. Then today, I got an email today to say "We have this great investment opportunity! Oh, by the way, screw you because you're not accredited." Until the rules change, don't bother emailing me. Until then it's just a tease, and a little insulting at the same time.

npt4279 14y ago
That's my bad. I should have segmented the list to exclude people who were certified as unaccredited. I forgot to do that in the rush of things. I'm sorry for the tease!

joonix 14y ago

Hmm, Wevorce raises some questions. I don't know if their disclaimer about how they are not really a law firm would pass muster. If they are providing legal services, they can't raise funds from non-lawyers.

scottnyc 14y ago

I really like this. However, I don't see anything regarding the terms and valuation which I would invest at. How can one responsibly invest without know what my $1000 actually gets me? If the process is that the valuation will be set once funds are raised and I will have the option to back out at that point - then this needs to be spelled out. Some clarity here is needed.

npt4279 14y ago
You're right; we should do a better job of communicating this. Right now, you have to click on the invest button to see the terms, and to further complicate things, many of the startups use the YC VC Fund Note, which delays the setting of the valuation.

plusbryan 14y ago

What's the difference between wefunder and Funders Club?