What is Crowdfunding?
Thanks to the JOBS Act, crowdfunding, with its roots as a donation and rewards platform, has grown to become an equity-investment platform for startups or early-stage companies to raise capital. This new form of private investing has opened up sources of new capital for businesses. Read more
Who Can Invest and How Much?
You must be 18 years or older to invest in a securities-based crowdfunding offering.
Investments in Title III offerings, such as those pursuant to Regulation Crowdfunding, are subject to certain constraints. The amount you can invest in a 12-month period is based on your net worth (less the value of your primary residence if you own a home) 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.
Please also review the SEC Investor Bulletin for Regulation Crowdfunding to understand the potential limitations on your investment.
Will I make a return?
Start-up investing is risky and there is no guarantee that you will make a return. You’ll make a return only if the company is acquired or if it goes public for a price that is higher than what you paid.
How it works: Investors
1. Create a profile
Sign up here if you haven’t already. We will need some additional information, including your name, address and date of birth. We will also ask for your annual income and net worth to determine how much you can invest under Regulation Crowdfunding. Any individual 18 years or older can invest up to $2,200 in a 12-month period, and that limit can increase up to $107,000 in a 12-month period depending on your income and net worth.
2. Review Opportunities
On our website, you will be able to review each company’s pitch as well as other information about the company, including their products and services, management team, and historical financial statements.
Ask companies questions in our discussion room.
3. Invest & Confirm
After you click invest and submit payment, you will receive an email to confirm your investment. This email will prompt you to electronically sign an agreement between you and the company for the purchase of equity. Once you confirm your investment, your funds are held in escrow by North Capital Trust until the company’s funding goal has been met. After a company’s funding goal is met, funds are released from the escrow account to the company. You can cancel your investment up to 48 hours before a company’s pre-set deadline. After that, your investment will be final.
How it works: Companies
We look for Mission driven US companies that are looking to disrupt an industry or create a new one can apply to be listed on the VedasLabs platform.
1. Apply to Raise
Companies can apply to be listed on the VedasLabs platform here. Our team will contact you to gather further information and discuss next steps.
2. VedasLabs Review
We conduct a review of each company’s application where we look at the market, technology, founders, team expertise, the problem the company solves, and current traction. Prior to being listed on our website, companies are required to disclose the following information:
- Pitch Deck (if available)
- Business Description
- Funding Goal
- Funding Deadline
- Use of Funds
- Information on the Officers and Directors
- Financial Information
- Specific Risks to the Company
- Current Traction
3. Final Decision
After we finish our review, we will decide if the company will be listed on the platform. VedasLabs then initiates the offering document preparation then the startup will be launched on the VedasLabs platform. This is where Companies can monitor progress, easily share the listing, and interact directly with investors in the discussion room to answer questions and share updates.
Do I have to be a US citizen?
The answer is simply no. Anyone who is over 18 can invest on VedasLabs and they don’t have to be located in the United States.
Whats the minimum investment amount?
The VedasLabs investment minimum is $10.
What are the Accepted Payment Methods?
VedasLabs accepts credit cards, PayPal, and ACH transfers from US bank accounts.
Whats the Cancellation Policy?
Investments can be cancelled up to 48 hours before the company’s pre-set funding deadline. After that, your investment will be final, and you will not be able to get your money back.
Companies reserve the right to reject, in whole or in part, any investment commitment at any time before the proceeds are drawn from the escrow account. Any rejected investments will be returned to the investor in full.
Can I resell my securities acquired on VedasLabs?
Because the startup company issuing the securities is private, you cannot sell your securities on the public market, making it potentially difficult to find a buyer.
In fact, you are restricted from reselling your securities in the first 12 months post closing of the offering, unless the shares are transferred:
- to the company that issued the securities
- to an accredited investor
- to a nuclear family member:
- a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships.
- in connection with your death, divorce, or other similar circumstance
- to a trust controlled by you or a trust created for the benefit of a family member (defined as a child, sibling or parent of you or your spouse) or
- as part of a later offering registered with the SEC.
Any transfer during this period is still subject to state and foreign laws.
You should know that there may be no market for the securities after the initial 12 month restricted period. Once the 12 month restricted period ends, any sale or disposition of the securities you hold must comply with applicable federal, state and foreign laws.
It is important that you only invest capital with the expectation of holding your investment for an indefinite period of time, and with the real risk of a total loss of your investment in mind. Only invest an amount you can afford to lose without changing your lifestyle. You can read more about the limitations on selling and transferring private securities here.