Assess their risks, liquidity, investments, returns, timeframes and other terms
Invest in startups in exchange for equity
Invest in rental homes
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 startups on Wefunder is highly risky, and there's a real possibility of losing your entire investment.
Investing on Ark7 carries risks such as market volatility, property value fluctuations, economic impacts, and potential liquidity challenges in the secondary market.
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.
Ark7 allows investors to sell their shares on a secondary market after a minimum holding period of one year, providing liquidity.
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.
Ark7 offers annualized cash return rates between 3.22% to 6.96%, or $0.1 to $0.58 per share, based on past performance or estimates for newer properties.
Investments on Wefunder are long-term, with an average return period of around seven years, particularly for convertible notes or SAFEs.
Ark7 targets long-term investments in real estate for appreciation but allows selling shares after a minimum holding period for flexibility.
Individuals 18 and older can invest on Wefunder, regardless of whether they are accredited or non-accredited investors. Additionally, Wefunder allows investments through entities.
Ark7 is open to U.S. citizens or residents over 18 with an SSN or ITIN and a U.S. bank account. Select offerings are for accredited investors only.
The assets on Wefunder, primarily startups and small businesses, are highly volatile due to the uncertain success of these ventures and fluctuating market conditions.
Assets on Ark7 exhibit volatility influenced by real estate market shifts, economic conditions, and demand fluctuations. While real estate is generally stable, values and rental incomes can vary. Additionally, liquidity and market demand on the secondary market may affect share prices and selling ease.
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.
Ark7 complies with SEC regulations, making necessary filings for transparency and undergoes regular independent audits for financial accuracy and operational compliance.
Ark7 secures comprehensive insurance for all properties, covering natural disasters, property damage, and liability, to protect investors' returns and mitigate financial risks.
Wefunder investments typically do not offer dividends, as they are often in early-stage startups focusing on growth.
Ark7 offers returns through monthly cash distributions from rental income, after deducting operating expenses, and long-term property appreciation. Distributions are prorated based on shares owned and deposited monthly. Property appreciation potential comes from home value gains, with shares sellable on the secondary market after a holding period. Monthly distribution amounts may vary due to operational factors.
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.
Investors can get their money back by selling their shares on Ark7's secondary market after a minimum one-year holding period or through property appreciation when they sell their shares.
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.
Ark7 charges a one-time 3% sourcing fee of the property market cap for acquiring and listing properties, and a monthly asset management fee of 8-15% of rental income for property and tenant management.
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.
Ark7 issues Schedule K-1 forms for properties taxed as partnerships and plans to issue 1099-DIV for properties treated as REITs, aiming to transition as they open to the public. Tax documents are sent before March 15th, considering depreciation and expenses to potentially reduce taxable income for investors.