Best Way To Invest Funds In Startups Via FundersClub
FundersClub is a new platform that aims to provide investors unprecedented access to investment opportunities and the tools to review and invest online with ease and speed.
In Company’s Own Words:
FundersClub is able to pool checks from many investors to make aggregated investments on behalf of individuals and institutions that were previously inaccessible to them.
When you invest in a FundersClub fund, you are purchasing ownership units in a fund that holds the specific private company stock or convertible notes, with a 1:1 relationship of fund dollars to underlying asset dollars.
This allows you to gain exposure to the company as if investing directly, although the fund is the actual shareholder.
This creates an attractive vehicle for startups that prefer to interface with a single entity, and enables you to participate in startup investing via better access, smaller check sizes, and lower fees.
In the event of a liquidity event such as an acquisition or IPO, you will receive your portion of the proceeds. For primary transactions, in most cases, FundersClub funds will own preferred shares.
How It Works:
The Browse Investments page allows you to browse opportunities to invest in funds for specific companies.
Each fund page relays company-provided information about the company including a video pitch of the founders and information on the management team, the product, the market, early traction, and news about the company, as well as legal documents describing the terms of your investment in the fund and the underlying holdings of the fund.
You can then choose to invest in the fund, agreeing to invest a specific amount and to completing required legal forms.
Investors will be given access to the deal on a first-come first serve basis and investors who opt to invest before the deal reaches its target will be reserved a spot.