Wefunder Review 2024: Pros, Cons and How It Compares

Billed as Kickstarter for investing, Wefunder brings private equity investment to the masses. Investors can peruse startups, dig into performance, scroll an Instagram-esque news feed for updates from startup founders, and more. But unlike Kickstarter, investors have the chance to see a return on their investment, either through repaid debt, equity, dividends or other investment structures. However, as in traditional private equity, investors should plan to invest for the long-term — at least five years, and possibly even 10 or more.

Since its launch, the platform has helped startups raise $845 million, with over 3,500 founders funded.

But Wefunder aims to be about more than just returns. The company is inviting investors to support founders by letting anyone invest small amounts (over $100) in early-stage startups that may otherwise never receive funding.

Wefunder is best for:

• Investors looking for local investment opportunities.

• Investors who want to invest in startups but have limited capital.

• Risk-tolerant investors.

• Investors with a very long time horizon.

Wefunder at a glance

Wefunder features you should know

VIP membership: Wefunder offers a VIP membership for $295 a year, which comes with access to exclusive premium deals, support from an investor concierge team, priority over other investors on waitlists when deals are oversubscribed, a membership card that offers perks from some of Wefunder's portfolio companies and a 20% discount on the company's regular investor fees when using bank transfer. Wefunder says some startups also offer better investment terms to VIP members.

Payment: You can purchase investments on Wefunder by depositing money into your Wefunder Cash account, where it is stored in FDIC-insured accounts at partner banks. You can also pay by bank transfer, wire transfer or credit card (although it’s worth noting that the fees for credit cards, Apple Pay and Google Pay are more than twice as high as those for other payment methods).

Lead Investors: On Wefunder, Lead Investors are individuals who have vetted startups looking for funding and have made an investment based on the startup’s terms. They have an active role in helping the startup grow, offering advice, connections and mentorship.

Lead Investors earn a share of the startup’s profits, and are therefore incentivized to see it grow and prosper.

As such, investors on the platform can look to Lead Investors to see where they’re investing, how much they’re investing and why they want to invest in specific companies. This is all highly visible for companies with Lead Investors, although there’s no guarantee every company will have a Lead Investor.

Some investments are for accredited investors only: Investments that don't fall under Regulation Crowdfunding may be available only to accredited investors. Being an accredited investor requires an income of $200,000 per year for the last two years ($300,000 with a spouse) or net worth of over $1 million, excluding a primary residence. (Learn more about becoming an accredited investor.)

Diverse investment opportunities: One of the positives about Wefunder is the huge variety of investment options. You can search the database by category (everything from alcohol to infrastructure), whether the business is local, the type of investment you’re looking for (debt or equity) and more. The screening function also lets you filter companies by revenue, fundraising type (debt or equity), female or minority founders, how many people have already invested and similar criteria.

Social platform: Investors have access to a feed of photos and updates from participating startups, and you can get in touch directly with all the companies vying for your dollar. This is an opportunity to learn about early-stage investing and the different types of investment structures available.

You’ll also create a profile based on personality traits, what you’re interested in and your financial information to help you understand which investments might be best for you. (It’s worth noting that Wefunder explicitly states it never endorses any of the companies on its platform.)

Investment portfolio: Every company you invest in is automatically organized in a folder in your Wefunder account, where you can see the amount invested, associated fees, status updates and any action that may be required.

Is Wefunder right for you?

Wefunder is not for the risk-averse. The website is full of disclaimers explicitly stating that investing in early-stage startups is riskier than the stock market, and there is a very real potential of losing all of your investment. Moreover, Wefunder describes the investments on its platform as more binary than the stock market, meaning stock market returns can vary over time, while startups typically either see success or failure. So if you’re new to investing, it may be best to take a more traditional approach as your first step into the market. The same is true if you need the money you plan to invest in the short-term — Wefunder suggests a timeline of seven years or more.

However, if you’ve already got a healthy investment portfolio and are looking to diversify long-term savings, Wefunder is an extremely easy platform for getting involved in private equity on a smaller scale than through traditional private equity firms.