Wefunder is a crowdfunding service which connects startups with investors online. [3] [4] Wefunder uses a provision in the 2012 JOBS Act which allows unaccredited investors to provide equity for entrepreneurial undertakings. [5] [6] [7]

Foundation

Wefunder was founded by serial entrepreneurs Nicholas Tommarello ​, Mike Norman ​, and Greg Belote in 2012. [8] The startup incubator Y Combinator backed Wefunder during its development and launch. [9] 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. [10] In total, the company has raised over $1.4 million from over 100 investors via the Wefunder platform. [11]

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 [12] [13] so much that they were in Washington, D.C. to watch President Barack Obama sign the bill on April 5, 2012. [10] The JOBS Act, which allows startups to advertise and generally solicit for investments, is set to be fully implemented by mid-2014. [14] [15]

Function & reception

Wefunder is predicated upon the idea that anyone, regardless of wealth, should be able to invest in a company. [16] 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. [16] [17] Once the full deregulations promised by the JOBS Act are unrolled, the company plans to lower the barrier of investor entry to $100. [18] [19] Tommarello said Wefunder's goal is to “fill the funding gap between angel investors and that first major round of capital.” [18]