Wefunder: The Complete Guide (2025 Edition)

Table of Contents

1. What Is Wefunder?

2. History & Background

3. How Wefunder Works

4. For Investors: What You Need to Know

5. For Founders: Raising Funds on Wefunder

6. Regulatory & Legal Framework

7. Fee Structure & Financial Requirements

8. Pros & Benefits

9. Risks & Criticisms

10. Recent Developments & Future Outlook

11. Conclusion

1. What Is Wefunder?

Wefunder is an equity crowdfunding platform that allows regular people (non-accredited investors) as well as accredited investors to invest in early-stage startups and small businesses in exchange for equity, or other investment instruments (like convertible notes, SAFEs, revenue share, etc.). help.wefunder.com+2wefunder.com+2

It’s similar in spirit to Kickstarter or Indiegogo in that you help support projects or companies you believe in — but the important difference is: you are investing to own part of the business, hoping for return, rather than just getting a product or a gift. help.wefunder.com+1

Minimum investment is often low (e.g. US$100 for many offerings), making startup investing more accessible than traditional venture capital. help.wefunder.com+2wefunder.com+2

2. History & Background

• Wefunder was founded around 2011-2012 by Nick Tommarello, Mike Norman, and Greg Belote. Wikipedia+1

• It was part of the move to democratize investment in startups: historically, only accredited (wealthy) investors had legal access to private equity in early-stage companies. Wefunder was one of the platforms that pushed for regulatory change that allowed non-accredited investors to participate. help.wefunder.com+1

• The JOBS Act of 2012 (Jumpstart Our Business Startups) played a key role. Under that law, Regulation Crowdfunding (Reg CF) was established, which allows companies to raise capital from many investors (including non-accredited ones), subject to certain limits and disclosure rules. Wefunder operates heavily under Reg CF. help.wefunder.com+2help.wefunder.com+2

3. How Wefunder Works

Here’s a breakdown of the process for both investors and founders.

For Investors

• Browsing Investment Opportunities: Investors can browse startups or small businesses raising funds (“Community Rounds,” “Regulation Crowdfunding,” sometimes Reg A+ or Reg D, depending on the offering) on Wefunder’s website. wefunder.com+1

• Minimum Investment: Many offerings allow you to invest with small amounts — $100 is common. Accredited investors may have fewer restrictions. help.wefunder.com+1

• Understanding the Terms: The investment might be in the form of equity, SAFE (Simple Agreement for Future Equity), convertible notes, revenue share, etc. The return (if any) depends heavily on the success of the business. wefunder.com

• Risk & Liquidity: Startups are risky. The value of your investment may go to zero. Also, startup shares are not very liquid — you may have to wait many years for an exit (e.g. acquisition or IPO). help.wefunder.com+2wefunder.com+2

For Founders (Businesses Raising Funds)

• Eligibility: Most types of startups or small businesses can raise on Wefunder, including brick-and-mortar, tech, restaurants, etc., though with some exceptions (certain industries, or if disqualified under “bad actor” provisions, etc.). help.wefunder.com

• Regulation Crowdfunding (Reg CF) is the main method. Other methods like Regulation A+ or Regulation D may also be available. help.wefunder.com+1

• Financial Disclosures: To raise via Reg CF, founders must provide GAAP financial statements (income statement, balance sheet, cash flow statement, statement of equity, etc.) for past fiscal years, depending on how large the raise is. The level of the financials (compiled, reviewed, audited) depends on how much money you want to raise. help.wefunder.com+1

• Using Wefunder’s Tools: Wefunder helps with paperwork, disclosures, compliance, and sometimes assists in matching founders with CPAs, lawyers, etc. Founders pay fees (a percentage of funds raised) but many startup-friendly resources are provided. wefunder.com+1

4. Regulatory & Legal Framework

• Regulation Crowdfunding (Reg CF): Under U.S. securities law (via the JOBS Act), companies can raise up to certain limits per year from both accredited and non-accredited investors. Wefunder is heavily used for Reg CF rounds. help.wefunder.com+2TechCrunch+2

• Regulation A+ and Regulation D: These are other exemptions under U.S. securities law for raising capital. Regulation A+ allows larger raises (for example for companies wanting to scale significantly), Regulation D is used for offerings involving accredited investors or other specific criteria. Wefunder supports these when possible. help.wefunder.com+2help.wefunder.com+2

• Financial Disclosure & Auditing: As mentioned, to comply, companies must submit financial statements. The extent of review depends on how much capital they raise. For example: small raises may only need compiled statements; bigger raises may need audited financials. help.wefunder.com+1

• Investment Limits for Individuals: Non-accredited investors are limited in how much they can invest under Reg CF, based on income/net worth. Accredited investors have fewer limits. help.wefunder.com+1

• Compliance & Rule Violations: Wefunder is regulated by FINRA as a funding portal, and must follow SEC rules. There have been enforcement actions (see below). FINRA

5. Fee Structure & Financial Requirements

For Founders (Those Raising Funds)

• Wefunder charges a flat fee for successfully raised rounds: a percentage of funds raised (for example 7.9%) plus an annual fee (often 0.5%), although caps may apply. wefunder.com

• Founders also need to pay for legal costs, accountants, preparing financial statements (depending on the size of the raise, whether reviewed or audited), compliance, etc. The cost of these tasks can vary significantly. help.wefunder.com+1

For Investors

• Minimum investments often are low (e.g. $100) but may vary depending on the individual offering. help.wefunder.com+1

• Investors might have to pay transaction fees (e.g. bank/credit card fees) depending on how they fund their investment. (Though specific fee amounts vary per round / payment method.)

• There are also costs inherent in risk (potential loss) and illiquidity.

6. Pros & Benefits

Here are the advantages of using Wefunder (from both investor and founder perspectives):

For Investors

• Accessibility: Allows ordinary people (not just wealthy “accredited investors”) to invest in startups. help.wefunder.com+1

• Low entry point: Many rounds allow relatively small investments. help.wefunder.com+1

• Early access: Opportunity to invest early in companies you believe in (tech, local, mission-driven) and potentially see large returns if the company grows.

• Community involvement: You’re investing not just with money but (often) as part of the community that supports the company’s mission.

For Founders / Businesses

• Broader capital source: Founders can raise funds from their community, fans, customers, not only from VCs or angels. wefunder.com+1

• Marketing & engagement: Running a crowdfunding campaign can help raise awareness, validate ideas, build early adopter base.

• Lower barrier: For many startups, using Wefunder is simpler / cheaper than traditional fundraising routes, particularly for smaller raises.

7. Risks & Criticisms

While Wefunder offers many benefits, there are also significant risks and drawbacks. Potential users (especially investors) should understand them well.

Risks for Investors

• High failure rate: Early-stage startups frequently fail. Returns are uncertain and rare. You could lose your entire investment.

• Illiquidity: There is usually no secondary market to easily sell your shares. Exits (mergers, acquisitions, IPO) may take many years, or may never happen.

• Dilution risk: Future rounds may issue more shares, diluting your ownership.

• Limited information: Some offerings may provide less detailed information; transparency may vary. Investors must do their own due diligence.

Criticisms / Issues

• Regulatory violations: Wefunder has had FINRA fines (e.g. $1.4 million) for having exceeded offering limits, diverting funds, misleading communications, etc. FINRA

• Disclosure & oversight: Some investors complain that companies do not keep them updated, or do not provide sufficient financial / progress reporting.

• Platform risks: Delays, technical problems, or lack of usability (such as app being removed) have been raised in user forums. Reddit+1

• Fraud or poor-quality deals: Because the barrier to entry is lower, some offerings may be riskier, potentially involving founders or ideas that are not well-vetted.

8. Recent Developments & Future Outlook

• Expansion into Europe: Wefunder has secured regulatory approval in some EU jurisdictions (e.g. Netherlands via the AFM) under European Crowdfunding Service Provider Regulation, which allows it to offer services more broadly in EU countries. Crowdfund Insider+1

• Growth in Reg CF market share: Wefunder is often cited as one of the leading platforms in the U.S. for Reg CF offerings. TechCrunch+1

• Profitability and scale: According to Wefunder’s own disclosures, in 2024 they generated around US$16.8 million in revenue and reported profit of over US$2 million. wefunder.com

• Community Rounds with VC co-investment: More deals are being structured so that startups raise capital from both VCs and their community / users, under the same terms. This gives community investors access to terms they’d otherwise not have. Business Insider

9. How to Use Wefunder: Practical Steps

Here are practical steps both for someone wanting to invest, and for someone wanting to raise funds:

If You Are an Investor

1. Create a Wefunder account

2. Verify status (accredited or non-accredited)

3. Browse offerings: Read the pitch, financials, risk disclosures, business plan, etc.

4. Decide how much to invest (based on your finances, risk tolerance)

5. Make the investment using whatever instrument is used (SAFE, convertible note, equity, revenue share, etc.)

6. Monitor progress: many startups provide updates; you may also get reports/follow-ups from founders.

If You Are a Founder

1. Check eligibility: make sure your business fits allowed industries, has required formation, no disqualifying “bad actor” history. help.wefunder.com

2. Prepare financial statements: bring together at least 2 years of financials if needed; hire a CPA if raise is larger. help.wefunder.com+1

3. Build your pitch & materials: business plan, projections, how you will use the funds, risks, exit strategy, etc.

4. Set terms: what you are offering, how investors will receive returns, etc.

5. Launch campaign: use Wefunder’s tools, comply with Reg CF or other applicable regulations.

6. Communicate & update: once funded, maintain communication with investors.

10. Comparison with Other Platforms

It helps to see how Wefunder stacks up against alternatives like Republic, StartEngine, SeedInvest, etc:

11. Conclusion

Wefunder represents a paradigm shift in startup investing, making equity funding accessible to more people. It lowers barriers for both investors and founders, enabling community involvement, early-stage backing, and new forms of financing. For many, it’s an exciting way to support companies they believe in and possibly reap returns, though with significant risks.

If you’re considering using Wefunder — whether to invest or to raise funds — go in prepared: understand the regulations, read all disclosures, be ready for long timelines and risk of loss. When done carefully, Wefunder can be a powerful tool in the democratization of finance.