WeFunder Tutorial and Review for Investing in Startups

Key Concepts

• Wefunder: A crowdfunding platform for investing in startups.
• Accredited vs. Non-Accredited Investors: Distinctions in investment eligibility.
• Convertible Note: A type of debt that converts into equity in the future.
• Valuation Cap: The maximum valuation at which a convertible note will convert to equity.
• Future Equity Contract: An agreement to receive equity in a company at a later date.
• Reg CF (Regulation Crowdfunding): Allows companies to raise capital from a large number of investors.
• Reg D (Regulation D): An exemption from registration requirements for certain offerings.
• Crowd Safe: A variation of the SAFE (Simple Agreement for Future Equity) agreement, tailored for crowdfunding.
• Alternative Investments: Investments outside traditional asset classes, such as stocks and bonds.

1. Introduction to Wefunder

• Salvador Brigman introduces Wefunder as a crowdfunding portal for investing in startups.
• Wefunder allows both accredited and non-accredited investors to participate.
• Investment amounts can be as low as $100-$300, making it accessible to a wide range of investors.
• The platform enables investing alongside angel investors and venture capitalists (VCs).

2. Signing Up and Exploring the Platform

• The video demonstrates the sign-up process, emphasizing privacy using Proton Mail (a Swiss-based nonprofit focused on internet privacy). A link to crowdcrux.com/protonmail is provided.
• The "Explore" tab allows users to discover investment opportunities in new startup companies and venture funds.
• Investors can view investments alongside top investors like Andreessen Horowitz, Khosla Ventures, Y Combinator, and Jeff Bezos.
• The platform provides insights into why other investors have chosen to invest in specific campaigns.

3. Filtering and Decision-Making Criteria

• The "Filter" tab allows users to refine investment options based on categories, business models, and sectors.
• Criteria include companies that have raised money in the past, are part of Y Combinator, have notable angel investors, minority founders, VC backing, or female founders.
• The time horizon for these investments is typically 3-7 years before seeing a return on investment (ROI).
• Investors should consider their risk and reward appetite when making investment decisions.

4. Geographic Exploration

• The "Map" section allows users to view trending investments in specific geographic locations (e.g., Miami, Florida; New York).

5. Evaluating Investment Opportunities

• The video examines specific investment opportunities, such as a spatial computing XR AI agent company with VC backing and $5 million in revenue.
• Details include the type of raise (convertible note with a $200 million valuation cap) and investor perks.
• Another example is an AR robotics company with a future equity contract and a $66+ million valuation cap.
• Investors can access financial details (P&L, balance sheet) to conduct financial analysis.
• The platform provides insights into why other investors have chosen to invest in the round.

6. Investment Process and Terms

• Minimum investment amounts vary by company (e.g., $1,000 for one company, $100 for another).
• The investment process involves reviewing contracts (Form C, LLC agreement, SPV subscription agreement).
• Investors can cancel their investment before the campaign closes.
• The video explains what investors receive when they invest and how they can earn a return through a crowd safe.
• Wefunder charges a 2% fee (capped at $150) for bank account and wire transfers.

7. Portfolio Management

• Users can create a portfolio to track their investments and a watch list to monitor potential investments.
• The platform allows users to fund their accounts with Weefunder cash.

8. Diversification and Alternative Investments

• Wefunder investments are categorized as alternative investments, alongside crypto and early-stage startups.
• Other forms of crowdfunding include real estate crowdfunding and debt crowdfunding.
• Salvador Brigman recommends his book, "Equity Crowdfunding Explained," for more information.

9. Key Takeaways

• Non-accredited investors can now invest in startup companies.
• Investors can mitigate risk by investing alongside VCs or filtering for profitable companies.
• Investing supports innovation and allows participation in the upside of new companies.
• The video references Oculus Rift's Kickstarter campaign as an example of the potential for crowdfunding to allow backers to own a piece of the company.

10. Conclusion

• The video encourages viewers to like the video, subscribe to the channel, and leave comments.
• Salvador Brigman offers a quick tutorial on Wefunder for beginner and intermediate investors.
• He emphasizes the exciting opportunity to participate in the growth of innovative companies through equity crowdfunding.