A Thorough Guide on How Wefunder Works by@scoutmine

A Thorough Guide on How Wefunder Works

Edward Culligan HackerNoon profile picture

Edward Culligan

CEO, Founder of ScoutMine, LLC

Wefunder is one of the top equity crowdfunding services for business startups and investors. If you are a business startup looking for funding, Wefunder should be the topmost on your list.

However, before venturing into anything, you must understand the ins and outs of how it works. And that's precisely what this article is about. In this article, you will fully understand how the Wefunder platform works even if you are a complete beginner.

Getting Started with Wefunder

To raise capital for your startup, you will need to start a campaign. However, before starting any campaign, you need to understand what is expected from your end and what Wefunder as a platform will provide for you. 

First, let's take a look at what is expected from your end.

●     You need to provide information about your business - the potential risks and GAAP financials. 

●     Create a public Wefunder profile. Wefunder has a custom-made editor that you can use to design a beautiful landing page. 

●     Invite your friends, family, colleagues, and customers to invest in your business.

That's about what is expected from your end. Now, let's take a look at what Wefunder will do for your campaign.

●     Generate, review, and file Form C for your business with the SEC.

●     Provide ready-made standard contracts for convertible notes, revenue shares, and standard SAFE.

●     Provide expert advice to help draft a personalized pitch and a compelling public profile page.

●     Promote your campaign to their community of over 500,000 investors.

●     Provides software that allows you to easily engage investors even after you close your campaign. 

I bet you are beginning to see reasons to use the Wefunder platform with all they have to offer. But don't start your campaign just yet. Let's get into how the platform works. 

The Three-part Process Involved in Running a Successful Campaign

I'm going to take you through the step-by-step guide on how Wefunder works in a three-part process as highlighted below:

Part 1 - The Pre- campaign Phase

●     Getting started on Wefunder.com. You begin your application and fill in the basic information about your business and your goals on Wefunder. You will also need to determine what type of terms you want to offer investors.

●     Wait for one to two business days for Wefunder to review your application and give you a fundraising estimate (the average amount they think you will raise on Wefunder).

●     Provide some more information for the SEC. You will also need to provide your GAAP financials and CPA reviews.

●     Build a beautiful and compelling public profile. This is what investors will use to determine if they want to invest in your startup or not. After creating your profile, the Wefunder team will evaluate it and provide expert advice and best practices.

●     Prepare for launch! This could take up to 10 days, and you should be readily available for any questions or clarification that might be needed. You will also be assigned an account manager on the Wefunder team. Your account manager will be your point of contact and communication moving forward. 

Part 2 - The Fundraising Phase

This could take up to 6 months, depending on how well you've done your due diligence. Once your campaign is live, you are required to bring about 50% of the crowd - with assistance from the Wefunder team. You will be given a period of four months to attain your minimum fundraising target. 

Once you've attained your minimum goal, you can withdraw a lump sum only once before the closing of your campaign. 

If you need any advice or assistance during this phase, be sure to reach out to the Wefunder team via your account manager. 

Part 3 - The Closing Phase

●     Tie up loose ends. Once you reach your maximum target or your deadline is reached, your campaign closes. Wefunder will assist in finalizing all your investments. They will also send a lump sum directly to your business bank account. You should note that Wefunder charges 7.5% of whatever you raised. 

●     Continue to engage the network of investors you have built. Post regular updates, send newsletters, and ask them for any form of support you might need. 

Learn more about Wefunder at https://ScoutMine.com/wefunder