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The main similarity, besides both being YC alumni: FundersClub and Wefunder both form single-purpose LLC's that aggregate small investors, and then make one in
by npt4279 13y ago
The main similarity, besides both being YC alumni: FundersClub and Wefunder both form single-purpose LLC's that aggregate small investors, and then make one investment into the startup. So the startup only has one investor on their cap table.
The main difference is one of long-term vision. FundersClub is invite-only and exclusive. Wefunder is designed for everyone to be able to invest in startups. We're most excited by Title III JOBS Act, which will let unaccredited investors invest as little as $100.
We believe that the true value of crowdfunding comes from having your most passionate users and customers invest, not just C-level execs in an invite-only club who you've never met. The people who love your product can invest small amounts on the same terms as professional investors.
- stirno 13y agoOne would hope that, in the future, a $100 investment doesn't cost the startup $25. ;)
- npt4279 13y agoWe'll be under a different regulatory regime by then. :) We also will decrease our costs as we scale.
- hpvic03 13y agoThanks for the reply. That's interesting, I wonder what Fundersclub aims to gain from excluding smaller investors. I have another question for you. What prevents your investment from getting squished in future rounds? I've been wanting to use a platform like this for a while, and that's one of my main concerns.
- npt4279 13y agoInvestors on Wefunder are investing on the same terms as the professional investors. It's possible that investments could get squished, but that would lead to a lot of pissed off people, not just the smaller investors in the fund.
- ph0rque 13y agoCan anyone link to/explain what the 10% carry means?
- npt4279 13y agoTo make it simple: Let's say you invest $1000 in a startup. The startup gets acquired and your stake is worth $10,000. You get your $1000 back, and then get 90% of the rest. So you get $9100, and Wefunder gets $900.
- ph0rque 13y agoSo x% carry means that the other party gets x% of your profit from a particular investment? Got it, thanks.