Equifund is an online investment platform that raises capital for private companies and real estate projects and guides investors through the investment process. In the past, private companies were limited to raising capital from banks, venture capital firms and other financial institutions, and only the wealthiest were given the privilege to invest with few restrictions. Today, Equifund offers private companies greater access to capital and offers investors vetted, investment opportunities — bridging the decades-long investment gap.
Crowdfunding is the action of raising funds from a large group of individuals (referenced as the “crowd”).
Each issuer conducting a crowdfund offering is required to file an offering statement with the Securities and Exchange Commission which provides detailed and important information about the company and the terms of the subscription agreement. Forms are publicly available on the SEC’s EDGAR database or on the issuers funding page hosted on any of the equifund crowdfunding platforms.
As an investor, it’s free! Equifund does not charge its users a fee to join.
Equifund charges private companies or real estate projects a fee of 7% of the total amount raised. This fee is payable in cash when they’ve reached their raise deadline or goal.
While anyone over the age of 18 can invest, regulators have set investment limitations since investing in private companies is unpredictable and they risk losing their entire investment. The investment limitations depend on the company’s offering type and whether or not the investor is accredited or non-accredited. Accredited investors are individuals who earn an annual income of $200,000 or have a net worth over $1 million. Non-accredited investors are individuals who do not meet these requirements.
Offering type and investment limitations:
Reg A+ Tier 1 offering: Accredited and non-accredited investors can invest any amount.
Reg A+ Tier 2 offering: Accredited investors can invest any amount. Non-accredited investors can invest a maximum of 10% of their annual income or net worth — whichever is less.
Regulation Crowdfunding offering: If your annual income or net worth is less than $107,000, you can invest a maximum of 5% of your annual income or net worth — whichever is less.
If your annual income and net worth are equal to or above $107,000, you can invest a maximum of 10% of your annual income or net worth — whichever is less and must be no more than $107,000.
The following table provides a few examples:
|Annual Income||Net Worth||Calculation||12-month-Limit|
|$30,000||$105,000||greater of $2,200 or 5% of $30,000($1,500)||$2,200|
|$150,000||$80,000||greater of $2,200 of 5% of 80,000($4,000)||$4,000|
|$150,000||$100,000||10% of 107,000($10,700)||$10,700|
|$200,000||$900,000||10% of $200,000($20,000)||$20,000|
|$1.2 million||$2 million||10% of $1.2 million ($120,000), subject to $107,000 cap||$107,000|
|Joint calculation. You can calculate your annual income or net worth by jointly including your spouse’s income or assets. It is not necessary that property be held jointly. However, if you do calculate your income or assets jointly with your spouse, each of your crowdfunding investments together cannot exceed the limit that would apply to an individual investor at that annual income or net worth level.|
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You can cancel your investment commitment up to 48 hours before the closing of an offering, which can be found on its dedicated page. Once the offering period is within 48 hours of closing, you will not be able to cancel for any reason.
Investing in private companies, particularly startups and early-stage companies, is highly speculative. You should not invest in them unless you can afford to lose your entire investment without any change to your lifestyle. Risks include but are not limited to:
- an issuers limited operating history
- lack of liquidity or any market for the resale of your investment
- possibility of fraud or misrepresentation
- arbitrary valuation of the company
- limited shareholder rights and the possibility of dilution
- inability to generate revenue or raise additional capital to fund operations.
We strongly recommend that you consult with an investment advisor before investing in any offering listed on Equifund.
To invest in an offering listed with Equifund, navigate to the offering page and click on the “Invest Now” button. A pop-up window will appear that will ask you to verify that you have reviewed our educational materials, enter your information, e-sign a subscription agreement and more. Following, you will receive instructions on how you can send your investment funds to complete your investment commitment. Your investment funds will be held by a third-party escrow agent until the issuer’s offering has closed or break escrow occurs.
*Before you invest in an offering, we strongly recommend that you review our educational materials, consult with an investment advisor and conduct your own due diligence.
When an issuer makes material changes to the offering terms, you will be notified by Equifund. You must review the material changes and reconfirm your investment commitment within five business days. Otherwise, your investment commitment will be canceled.
When you send your investment funds, your funds will be held by a third-party escrow agent until the issuer’s offering has closed or break escrow occurs.
Break escrow means the issuer has met their funding target before their deadline and has started the process to access the funds. The process starts with notifying investors that they are closing their offering and will provide the revised early closing date. Once the 48 hours leading up to the new closing date has elapsed, the issuer will review and execute the subscription agreements and Equifund will instruct the third-party escrow agent to release the funds.
When an issuer does not meet its funding target by the stated deadline, your investment commitment will be refunded to you without deductions or fees. In addition, you will receive an email confirming your investment commitment has been cancelled.
If you have any questions about an offering, we recommend that you navigate to the offering page and contact the company’s management team through the communication forum.
If you have any questions about Equifund’s services or technology, we recommend that you contact us by emailing email@example.com.
It depends on your investment. Once the crowdfund offering closes and your investment subscription is accepted, the issuer will counter sign any subscription documents (such as Subscription Agreement) in electronic form and you will receive a copy via email. Depending of the type of security, you will also receive a copy of the countersigned security (SAFE, Note etc.) or a copy of the equity security (Common Stock, Preferred Stock etc.). However, some companies do not actually issue paper certificates for common stock or preferred stock but instead your interest is held as a “book-entry” which means its reflected in the books of the company. You may receive a ceremonial certificate (not an actual stock certificate) reflecting such book-entry interest.
In the offering documents, issuers are required to set funding goals, funding limits and a funding deadline. If an issuer meets its funding goal and assuming the offering period has not expired, you are still able to invest. If the issuer reaches the maximum funding amount before the deadline, the issuer will close the offering and execute the subscription agreements.