Fundr Facts: Accredited Investors
Many people qualify as accredited investors, but don't realize it. Fundr only accepts accredited investors on the platform to protect founders and other investors. Read on to see what an accredited investor is, how to prove you are one and how to get started with Fundr!
I’m thinking about becoming an investor. What do angel investors do?
Angel investors typically invest in pre-seed to early stage startups, in exchange for equity or convertible debt. The amount of equity an investor requests usually depends on how much funding the investor provides in these early stages. Angel investors are also known as angels, seed investors, private investors, or business angels.
I don’t know any startups. How do angels find strong investments?
Traditionally, investors find startups to invest in through warm introductions by other investors or by meeting startup founders in their own network. This process limits the field for investments. This is exactly where Fundr’s game-changing platform comes in. The next great tech startup can be found in any neighborhood, and can be created by any person with a smart idea.
How will I know if the startup is worth my investment?
Fundr takes the legwork out of startup investing for investors by evaluating startups on 90 different data points that startups submit to be part of the platform. Each company’s unique Fundr Score™ out of 100 gives a dashboard view of the business’ market, traction, and team - the details every investor wants to know.
I want to invest! Can I be an angel investor?
Most angel investors are accredited investors, meaning that they are high net-worth individuals who have a net worth of $1 million or more, or have earned $200,000 in income for the previous two years, or have a combined income of $300,000 for married couples.
In 2020, the definition of an accredited investor is being modernized. For example, investors may also become accredited based on certain professional certifications, designations or credentials acquired from an accredited educational institution. Limited liability companies (LLCs) with $5 million in net assets may also be accredited investors. Accredited investors can be individuals or organizations, meaning that these investors will bring significant assets, value, and experience to the high-potential startups in Fundr’s portfolio.
What does Fundr need to verify that I’m an accredited investor?
While other platforms may allow non-accredited investors, which leads to a faster verification process, Fundr is only accepting accredited investors to join the platform at this time due to Regulation D, Rule 506(c) standards. What this means is that we require investors to prove accredited status either through tax documents or a verification letter signed by a financial advisor or accountant. This helps us protect everyone on the platform - including other investors - from misrepresentation or fraud.
This sounds great! Why aren’t more people angel investors?
While it’s estimated that there are over 13.6 million accredited investor households in the United States, only three percent are active angel investors. Why? The barriers to investing are primarily time, education, and access to credible startups. Fundr is here to support investors and bring angel investing to a broader coalition of people who want to invest in the next great startups.
OK, let’s say I’m invested. What do I do once I have startups in my portfolio?
Once an investor is working with a startup, the founders and the investor stay closely connected on the progress the business is making. An investor can be an advisor and a mentor to a startup founder, or can take a more passive role. Typically, investors manage the financials, communication with the startup founders, and reporting on their own. With Fundr, investors benefit from key features like standardized term sheets, automatic money transfers, and productive communications tools that enable relationship-building with their investees.
It’s time for me to become an investor. What’s my next step?
Sign up to join the funding revolution and invest in Fundr’s first portfolio of 15 startups! Make sure you have the documents you need to verify your status: either two years of tax returns or a letter from your financial advisor or accountant (we provide one that you can pass along if you don’t already have one).
These portfolio companies have some impressive stats: $9.4 million in collective revenue, 35% average monthly growth, $2 million in prior funding from Google for Startups, Backstage Capital, Techstars, Tech Wildcatters, SputnikATX and more.
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