Due to high demand, the Kleiner Device Labs offering is now oversubscribed.
At the time of writing, they have approximately $1,075,000 in capital commitments.
What happens when a deal is oversubscribed? Can I still invest?
If you’ve ever seen the word “oversubscribed” on a Pre-IPO deal, here’s what this means for you as a potential investor…
First, let’s talk about the word “subscribed.”
Whenever you are going through the investment process, after you enter in all of your information, you will be asked to sign something called the “Subscription Agreement.”
This document is a formal agreement between a company and an investor to buy shares of a company at an agreed-upon price.
When you – the investor – sign and submit your Subscription Agreement, this means you have made a Capital Commitment.
However, just because you have requested an allocation of shares from the company does not mean you will get them.
Why? Because in some cases, there is more demand for shares than there is supply.
When this happens, the offer is now “oversubscribed.”
So how does the company decide who gets shares and who doesn’t? They have four options…
- Decline – They can decline to take investments from certain investors…
- Reduce – They can reduce the allotment of other investors to make sure everyone gets in the round…
- Jump Ball – Whoever gets their money in first, gets the shares they requested…
- Increase – They can sell more equity than originally planned in order to fill everyone’s orders (but still within the limits of the exemption they are using to raise capital).
This means if you see an offer that is oversubscribed, it doesn’t mean the offer is closed…
It just means there is more demand than supply.
If you’re interested in investing in the company, there’s still a chance you can get shares… as long as you sign that Subscription Agreement and get your payment sent ASAP!
With this in mind, you’ll want to make sure you use a payment method that will allow for your funds to be remitted and cleared the fastest.
Here’s a list of the hold times for the most common payment methods…
- Wires — 24 hours (one business day) following receipt of funds;
- Credit and Debit Cards – 24 hours (one business day) following receipt of funds.
- ACH — 10 days following receipt of funds;
- Checks — 10 days following deposit of funds to the Escrow Account;
Your early-stage experts,
Equifund.com
