Frequently Asked Questions
Investing
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What is Regulation Crowdfunding?
Regulation Crowdfunding provides a framework for [registered] funding portals such as FundMe to operate an online platform for businesses to offer and sell securities in reliance on Section 4(a)(6) of the JOBS Act. Before this, it was difficult for private businesses to sell securities to the public. The JOBS Act allows private businesses to sell securities to non-accredited investors (not just investors with a certain level of income and net worth).
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Do my funds go in an escrow account?
Yes, all investments on FundMe are placed in an escrow account hosted at Prime Trust LLC. Funds are transferred to the Issuer only after the minimum fundraising target has been met and the offering is closed.
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You can pay with an e-check online, by mailing a check, or by wire transfer. Instructions will be provided during the investment process.
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Anyone can invest in Regulation CF offerings. Because of the risks involved with this type of investing, however, you are limited in how much you can invest during any 12-month period. The limitation on how much you can invest depends on your net worth and annual income.
If either your annual income or your net worth is less than $107,000, then during any 12-month period, you can invest up to the greater of either $2,200 or 5% of the lesser of your annual income or net worth.
If both your annual income and your net worth are equal to or more than $107,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is lesser, but not to exceed $107,000 of securities in aggregate across all issuers conducting a Regulation CF offering.
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I changed my mind, can I cancel my investment?
Yes, you have up until 48 hours prior to the deadline posted on the offering page and included in the offering documents (Form C) (which may be changed from time to time) to cancel your investment commitment for any reason. No cancellations may be made within the 48 hours prior to the end of the offering term. If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to the issuer upon closing of the offering.
If there is a material change to the terms of an offering or to the information provided by the issuer, we will give or send to any investor who has made an investment commitment notice of the material change and notice that the investor's investment commitment will be cancelled unless the investor reconfirms his or her investment commitment within five (5) business days of receipt of the notice. If the investor fails to reconfirm his or her investment within those five business days, we will (within five business days): notify the investor that the commitment was cancelled, the reason for the cancellation and the refund amount that the investor is expected to receive; and direct the refund of investor funds.
If material changes to the offering or to the information provided by the issuer regarding the offering occur within five business days of the maximum number of days that an offering is to remain open, the offering will be extended to allow for a period of five business days for the investor to reconfirm his or her investment.
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What happens if an offering doesn't reach its funding target?
If an offering doesn't reach its minimum funding amount by the target funding date, you will be refunded your investment.
Raising Capital
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FundMe is a Regulation Crowdfunding ("Reg CF") funding portal where Issuers can offer equity securities and US residents can invest in companies.
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How can I raise capital for my business?
To create a new offering on FundMe, submit your application info using the 'Raise' button in the top menu. Just fill in all the fields following the instructions on-screen, click the 'Save' button, and we will review it with 1 week and let you know.
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How do I receive funds from my successful Offering?
FundMe will direct the escrow agent to release funds from escrow for an offering after they have met the minimum target per the terms of the offering and escrow agreement.
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How much does it cost to raise capital on FundMe?
We do not charge investors any fees for accessing the portal. FundMe and other third party service fees for each offering are disclosed in the respective offering materials. FundMe.com, Inc. will receive a percentage of the capital raise per offering (from 1% to 5%) paid by the Issuer and a 1.5% Technology fee (up to a maximum of $75) per investment which will be paid by the Investor. There will be no charge in case of cancellation of investment or if the campaign doesn’t reach it’s minimum funding target. In the future, FundMe may take an equity interest in issuers in the amount of a percentage of the total offering in lieu of or in addition to the commissions referenced above.
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Does FundMe accept any business that applies?
No. Each application must meet preliminary business requirements set by FundMe and strict legal requirements under Regulation Crowdfunding. Additionally, FundMe reviews every proposed offering. In some instances, FundMe will choose not to list offerings because of the characteristics of the business or the funding request. For example, FundMe does not accept businesses that promote illegal activities or offensive behavior (e.g., hate speech, encourage violence toward others) through its business or via the products or services offered for sale.
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No, we only offer equity participation. SAFEs don’t have a maturity date or pay interest, so they may never convert to equity, and there is nothing in a SAFE that calls for the investment to be repaid to the investor! Investors in SAFEs must rely on an event, such as an acquisition, public offering or subsequent round of funding to get any potential payback, but there is no guarantee that any of those events will occur.