Assess their risks, liquidity, investments, returns, timeframes and other terms
Invest in commercial real estate projects
Invest in startups in exchange for equity
Minimum investment amounts on CrowdStreet start at $25,000, with the exact threshold varying by individual project.
The standard minimum investment on Wefunder for most Community Rounds is $100. However, the exact minimum can vary based on the specific offering and the investor's status as an accredited investor.
Investing via CrowdStreet entails typical real estate risks such as market fluctuations and property-specific issues, with no guarantee of returns and potential for capital loss.
Investing in startups on Wefunder is highly risky, and there's a real possibility of losing your entire investment.
CrowdStreet investments are generally illiquid, with capital committed for several years until a potential liquidity event, such as a property sale or refinancing, without a secondary market for early exit.
Wefunder's investments are not highly liquid, as there is no public market for selling your stake. After one year, you can sell to any interested buyer.
CrowdStreet has a historical 17.9% Realized IRR and a typical 3.1-year hold period for investments, with returns varying based on equity shares, debt interest, or hybrid terms, and property sales.
On Wefunder, investors can earn returns through different investment mechanisms: Debt, Convertibles Stock (No Dividends), Stock, Dividends. Investment returns on Wefunder vary by investment type, with dividends more typical in later-stage, non-tech businesses.
CrowdStreet investments typically have a hold period of 3.1 years on average, with some ranging from 3-5 years and others up to 10 years, reflecting a long-term investment horizon.
Investments on Wefunder are long-term, with an average return period of around seven years, particularly for convertible notes or SAFEs.
Individuals must be accredited U.S. residents with valid identification to invest on CrowdStreet, while entities need U.S. accreditation, taxation, and verification, subject to CrowdStreet's approval.
Individuals 18 and older can invest on Wefunder, regardless of whether they are accredited or non-accredited investors. Additionally, Wefunder allows investments through entities.
Assets on CrowdStreet may experience volatility due to economic shifts, interest rate changes, and local market trends, affecting property values and investment returns.
The assets on Wefunder, primarily startups and small businesses, are highly volatile due to the uncertain success of these ventures and fluctuating market conditions.
CrowdStreet's offerings are regulated by the SEC and subject to regular audits for compliance, ensuring adherence to legal standards for securities and real estate investments. However, details on specific audits and regulations are not publicly disclosed.
Wefunder is regulated by the SEC and FINRA under Regulation Crowdfunding (Reg CF), requiring it to adhere to strict rules about investment limits, company fundraising, and disclosures.
CrowdStreet's properties are typically insured against physical damage, but this does not cover market risks or guarantee full property value protection. Investors should note that insurance mitigates, but doesn't eliminate, all investment risks.
CrowdStreet investors may receive distributions, typically on a quarterly basis, based on the cash flow and profitability of their investments, but these are not guaranteed and depend on the specifics of each project.
Wefunder investments typically do not offer dividends, as they are often in early-stage startups focusing on growth.
Investors on CrowdStreet typically receive their money back after a liquidity event like a property sale, based on the timeline of the specific project's business plan. Real estate investments are illiquid, so funds cannot be withdrawn on demand.
On Wefunder, investors primarily see returns from liquidity events like acquisitions or IPOs, where investments may convert to cash or shares. After the first year, shares can be sold to any interested buyer, with Wefunder facilitating the transfer process. For debt investments or revenue shares, returns follow the agreed terms, like fixed repayments or revenue-based payouts.
CrowdStreet investments may include sponsor-determined fees such as acquisition, asset management, and property management fees, along with performance-based carried interest.
Wefunder charges a one-time transaction fee of 2% for bank payments and 5.5% for credit card payments. For WeFunds, an administrative fee covers lifetime costs like filings and accounting, with no additional contributions required from investors.
CrowdStreet issues Form K-1 or other relevant tax documents to investors for annual tax reporting, with the advice to consult a tax advisor for proper tax treatment of investments.
Wefunder supports tax reporting for investors by providing Schedule K-1 forms for those invested through LLCs or SPVs, detailing taxable gains or losses. For investments receiving payments, such as revenue shares, Form 1099 may be issued to report income.