What is the difference between crowdfunding and equity crowdfunding?
Equity crowdfunding has an equity ownership component. This means that investors are investing into a company in return for an equity ownership stake in that company and not a product or service.
If I am non-accredited, can I invest on DreamFunded?
Yes. The SEC passed Title III of the JOBS Act in May of 2016, which allows non-accredited investors to invest in private companies. DreamFunded has been approved by the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) and is licensed to operate as a funding portal. Non-accredited investors are able to invest in all DreamFunded investments.
What are the main benefits of investing with DreamFunded?
Insider access to pre-screened deals is a major benefit. We utilize our network to gain access to promising startups. We thoroughly vet startups prior to featuring them on our platform. Another benefit of our platform is the opportunity to invest as little as $60. Angel investors typically need at least 25 lifetime deals to adequately reduce the risk of this asset class.
*Note: Diversification does not guarantee profit or protection against loss.
Can I invest from my IRA in DreamFunded opportunities?
Yes, IRA funds can be used to invest in DreamFunded startups. Please contact us for more information. See the "Contact Us" page.
Is DreamFunded focused only on seed stage startups?
No, DreamFunded.com offers a wide variety of technology based private companies; from seed to later-stage.
How are the deals selected for the DreamFunded platform?
Issuers on the DreamFunded platform are sourced in the following ways:
- Issuers apply for funding through the DreamFunded platform.
- DreamFunded sources deals from angel groups, VC-firms, incubators and sometimes even other platforms.
DreamFunded often allows our members to invest alongside top-tier VC Firms, Angel Groups and Incubators to source potential investment opportunities. Many of these investments have completed due diligence documents available for investors.
The Kauffman Foundation’s Wiltbank study showed that deals on which angels devote 40+ hours of due diligence provided 7x greater returns over investments on which angels spend 20 hours or less of due diligence. Due Diligence does not guarantee profit or protection against loss.
Due Diligence consists of: interviews and background checks on all company team members, validation of market size and customer acceptance, evaluation of product and technology, analysis of the competitive environment, and assurance that terms of investments meet exacting standards. DreamFunded recognizes standard due diligence as outlined by the Angel Capital Association (ACA).
DreamFunded has recruited a world-class investment committee to review the due diligence previously completed by angel groups and VC partners to assure each deal sourced from a third party meets DreamFunded standards for anticipated investment performance.
Why would experienced angels invest through DreamFunded?
One key to success in startup investing is diversification, which means investing in as many as 25 companies in a lifetime. Diversification and sufficient due diligence are the two most important tactics for reducing risk in this asset class. By providing many investment opportunities in screened investment opportunities with small investment minimums, DreamFunded provides experienced angels with the opportunity to quickly expand their portfolio and achieve best practice diversification. Diversification does not guarantee against loss or ensure a profit.
Why would existing angel groups partner with DreamFunded?
DreamFunded offers existing angel groups two main benefits:
(1) DreamFunded members will be “topping off” rounds of investments that may exceed the investing capacity of a single angel group.
(2) Entrepreneurs usually require multiple rounds of investment to achieve positive cash flow or exit. Angel groups have found that recruiting more investors in early rounds provides a larger base for follow-on investments in startups.
How does DreamFunded make money?
All investments from members will be made directly to the issuer and will be listed on the cap table of the issuing company. Once a company has reached its investment goal, DreamFunded will withdraw as low as 2% to 5% from the total funds collected for each company, for accounting, legal and operations fees associated with the investment.