Wefunder is a crowdfunding service which connects startups with investors online. Wefunder will use a provision in the 2012 JOBS Act which will allow unaccredited investors to provide equity for entrepreneurial undertakings once it takes full effect.
Wefunder was founded by serial entrepreneurs Nick Tommarello, Mike Norman, and Greg Belote in 2012. The startup incubator Y Combinator backed Wefunder throughout its development and launch. The company raised more than $500,000 in 2012, receiving startup capital from nearly 60 investors, including angel investors Nihal Mehta, Dharmesh Shah, and Bill Warner. In total, the company has raised over $1.4 million from over 100 investors via the Wefunder platform.
Tommarello, Norman, and Belote extensively lobbied with the U.S. Securities and Exchange Commission (SEC) and in the United States Congress for the passing of the JOBS Act. So much so that they were in Washington, D.C. to watch President Barack Obama sign the bill on April 5, 2012. The JOBS Act, which allows startups to advertise and generally solicit for investments, is set to be fully implemented by mid-2014.
Function & reception
Wefunder is predicated upon the idea that anyone, regardless of wealth, should be able to invest in a company. As of now, only accredited investors are legally able to fund startups, and these investors must put up at least $1,000 to have an equity share. Once the full deregulations promised by the JOBS Act are unrolled, the company plans to lower the barrier of investor entry to $100. Tommarello said Wefunder's goal is to “fill the funding gap between angel investors and that first major round of capital.”