Home Forums The Entrepreneur’s Corner Wefunder – Lead Investor

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    This was mentioned on the A&E Facebook page.

    I’m curious what Neil & the A&E advisors opinion is on Wefunder starting to use Lead Investors and the fact they will be given a 10% cut of all returns once an event happens with a company.
    Is the A&E network aware of this?
    Has the Lead Investors for recommended deals been vetted by A&E?
    If so, what is their opinion?
    It seems to me we are paying for A&E to act in that same roll, vetting and recommending top quality investment opportunities.
    In my opinion the A&E Network should be steering companies looking to to a crowd funding raise away from the Wefunder platform.

    I would love to get some feedback from A&E
    Paul Boyer

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      • Paul

        Hi Stephen,

        Thank you for the response.
        I am aware what the responsibilities of a Lead Investor on WeFunder.
        Where I have a problem is for a potentially small investment, they seem to receive a disproportionate amount of the proceeds should an exit occur. One person’s investment was $2000.00 and another’s was $3000.00.
        To receive 10% of the exit amount is large considering the invest can be relatively small.
        The Lead Investor’s investment is shown on the WeFunder website.

        Also from what I read they are pushing Lead Investors for all of their new companies doing a raise but providing no background on who the lead investor is. Therefore if A&E in vetting the company owner should they not also be vetting the Lead Investor ?

        Paul Boyer

      • Stephen B.

        Hi Paul,

        We are aware of the Lead Investor program that Wefunder is implementing. The companies that we featured who are raising or previously raised on Wefunder do not have Lead Investors assigned as of my writing this post.

        The role of Angels & Entrepreneurs Network is very different from that of the Lead Investor. Angels & Entrepreneurs Network publishes information about the companies we feature. We provide our independent analysis of the companies for our readers’ benefit and attempt to go above-and-beyond what Wefunder provides by interviewing the Founders/Executives directly. We believe our content helps a reader better decide whether or not to invest. While we try to keep our readers updated on companies after the campaigns are completed, we are not involved in ongoing maintenance of our readers’ investments.

        A Lead Investor, on the other hand, is involved in the investments until a potential exit. The Lead Investor will vote on behalf of the Wefunder securities holders, who are all combined into a single entry on the issuer’s cap table. In return for their efforts, Lead Investors are compensated. Note some of the responsibility of the Lead Investor that Angels & Entrepreneurs does not provide:

        > Directs the signing of documents on behalf of all investors on Wefunder, such as SAFEs converting to equity, follow-on financing authorizations, acquisitions, or any other corporate action. (Technically, XX Investments LLC, as the Custodian, signs documents on behalf of other investors – based on the Lead’s direction). These are the same documents a Lead signs for their personal investment.

        I hope that this information is helpful. Please feel free to reply with further questions.

        Stephen B.

        Any and all communications from employees should not be considered personalized investment advice. Although our employees may answer your questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.

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