Private investing has moved public. It was just five years ago that you could not invest in a startup company unless you were Private Equity, Venture Capitalist, or an accredited angel investor. Today, the investing landscape is rapidly changing. Not only can retail investors invest in startups in the private market, but they can easily access the private real estate market as we talked about in our Fundrise review. Crowdfunding has made this possible. And as we see more and more crowdfunding platforms come online, choosing the right platform is almost as important as choosing the right startup to invest in. Today, we look at a popular crowdfunding platform with our Wefunder review.
In 2016, Congress introduced the JOBS Act which gave retail investors the chance to invest in startup companies in the private market. Since then, the crowdfunding market has exploded across all its categories; reward-based, donation, debt, and equity. However, equity crowdfunding is growing the fastest by far.
Some of the crowdfunding statistics are truly eye-opening. In 2020 alone:
With these types of numbers, it is astounding that crowdfunding and private investing has only been available to non-accredited investors for five years. It also shows you the demand investors have for alternative investments outside of the stock market.
With demand expected to skyrocket, we will see a continued growth in crowdfunding platforms. So, if you are interested in crowdfunding and private investing, it is crucial to do your due diligence on both the fund as well as the crowdfunding platform itself.
A crowdfunding platform that provides investors a wide variety of deals, great research and an intuitive user experience is Wefunder.
Before we get to our Wefunder review, it is important to understand what Wefunder is.
Wefunder is a crowdfunding platform that was created 10 years ago with the goal of connecting startups with Angel Investors and Venture capitalists. It opened to the retail, non-accredited investor in 2016. Since inception, Wefudner has funded 548 startups with $208million.
Wefunder is an excellent alternative to the stock market for those seeking a different way to invest through private investing in startups.
There are significant differences between what Wefunder offers and the stock market:
So, now that you have a good sense on what Wefunder is, let’s take a dive into the Wefunder review to see how it stacks up in the crowdfunding space.
Our Rating:
4/5
Wefunder is an excellent Crowdfunding platforms that allows non-accredited investors the ability to invest in startups in the private market. WeFunder allows investors to invest in a variety of categories, including; Debt, Equity, B Corps and even the local community. There are a wide variety of deals with the total number of available startups currently at 86.
best for:
non-accredited investors, crowdfunding, risk-tolerant investors
Get Wefunder Pros & ConsPros:
Cons:
Wealthplicity’s Wefunder review looked at 5 points of critical criteria to score its overall performance:
Wefunder is an excellent platform for those seeking alternative ways to invest outside of the stock market. Investors interested in startups and the private market will find more than enough deals to keep them intrigued and satisfied.
While the platform has great attributes that makes it attractive for beginner investors such as, easy usability, excellent due diligence around deals, and low minimum investments, the inherent risk of investing in startups makes this platform more suited for experienced investors.
Wefunder is also a great platform for those who are interested in contributing to socially impactful causes as there are a great number of deals centered around clean energy, infrastructure, and minority owned.
Wefunder fees are very straight forward though they are a little higher than other crowdfunding platforms we examined.
For payments made by bank ACH, wires, or checks, Wefunder charges a transaction fee of 2% with a minimum of $8 and a max of $100. For credit cards, Wefunder charges a 3.5% fee per transaction.
Wefunder is open to all U.S. citizens or permanent resident. You do not have to be an accredited investor to invest in a fund on Wefunder.
The minimum required investment is $100 but the average investment varies by fund.
As of Jan 2021, there are 86 startups on Wefunder and 100% of them are still active. There is a great variety of deals to invest in on Wefunder and it allows you multiple sorting features to home in on your are of interest. Wefunder has broad crowdfunding categories that allows you to invest in equity, debt, your community, and b corp companies. After selecting your crowdfunding category of choice, you have a selection of sub-categories that allows you to further refine your search:
Wefunder’s usability is excellent. The layout and navigational structure of their platform allows any investor to easily find a deal of personal interest. They have an extensive FAQ section that answer some in-depth questions.
One of the best features is the actual process of investing in a deal. Where a lot of other investing apps make you sync up a bank account and go through multiple levels of verification to the point that it feels a little invasive, Wefunder allows you to invest with your credit card. Though the fee is 1.5% higher if you do this, the convenience and privacy is well worth it.
Research of a fund is easy and exciting. There is a consistent format to the due diligence that allows you to amass a large amount of research in a short amount of time.
Finding critical information on Wefunder was very easy. In fact, they made sure that you understand that private investing is risky.
I also like the fact that they are transparent with their results and returns from their investments. This is not always readily available on other crowdfunding platforms.
In Summary:
As far as crowdfunding platforms go, Wefunder is best in class. They are one of the original platforms but have created a unique and transparent private investing platform.
We encourage you to understand that crowdfunding investing is very risky but if you do your due diligence and think private investing is right for you, Wefunder can be an excellent option.
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