Assess their risks, liquidity, returns, and timeframes
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 in Sweater's Cashmere Fund, like any venture capital investment, carries inherent risks. These risks include market volatility, economic conditions, and challenges specific to the companies in which the fund invests.
Investing in startups on Wefunder is highly risky, and there's a real possibility of losing your entire investment.
Sweater provides biannual redemption windows for investors to access their investment before the end of the investment term. However, there may be restrictions and limitations on the redemption process.
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.
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.
Sweater's Cashmere Fund is designed for long-term investments, but they provide biannual redemption windows for investors to redeem a portion or all of their investment.
Investments on Wefunder are long-term, with an average return period of around seven years, particularly for convertible notes or SAFEs.
Any U.S. resident over the age of 18 with a Social Security Number (SSN) is eligible to invest in Sweater's Cashmere Fund.
Individuals 18 and older can invest on Wefunder, regardless of whether they are accredited or non-accredited investors. Additionally, Wefunder allows investments through entities.
The assets on Sweater's platform, including the investments made by the Cashmere Fund, can be subject to volatility.
The assets on Wefunder, primarily startups and small businesses, are highly volatile due to the uncertain success of these ventures and fluctuating market conditions.
Sweater operates under SEC regulations, allowing them to accept investments from non-accredited investors.
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.
Specific details about Sweater's insurance policies are not available on their website.
According to Sweater's website, the Cashmere Fund does not pay dividends to investors.
Wefunder investments typically do not offer dividends, as they are often in early-stage startups focusing on growth.
Sweater's Cashmere Fund charges a fee of up to 2% for redeeming investments during the semi-annual redemption windows.
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.
Venture funds, like Sweater's Cashmere Fund, generally provide tax reporting support to investors.
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.