Wefunder launches campaign to help crowdfund loans from small businesses affected by coronavirus – Newsdio

0
61


With the COVID-19 crisis, startups in Silicon Valley are looking for opportunities where they can increase the visibility of their services and be useful to individuals and businesses deeply affected by the pandemic.

Wefunder, an investment crowdfunding platform, announced on Tuesday an initiative to help small businesses affected by the coronavirus to guarantee loans through its platform on friendlier terms.

The objective of the coronavirus crisis loan program is "to provide critical cash flow during this economic crisis at a reduced interest rate," a company statement said. Loans can be structured in amounts ranging from $ 20,000 to $ 1 million with deferred payments until 2021 (and flexible, depending on income). The startup has a fairly simple calculator on its site to help companies estimate what their payment structure would look like.

For Wefunder's Part of it is not charity: They are still taking a portion of the high total volume, although they are halving their usual percentage from 7.5% to 3.75%. Wefunder also charges people a 2% cut in their contribution.

Wefunder was founded in 2011 and has raised just over $ 9 million in funds from investors, including Visary Capital and Y Combinator. In recent years, legislation has been passed that has made it possible for companies to raise small amounts of money, around $ 1 million or less in total, from unaccredited investors. The company says the companies have raised $ 130 million to date through the platform.

In 2016, when the legislation was first introduced, equity crowdfunding was a hotly debated topic, but for the most part, equity crowdfunding has not become commonplace. Part of this is the result of prevailing seed capital, something that has likely increased the risk of startups seeking financing through platforms like these. Obviously, this is a minor problem when a good part of the motivation to invest in a small company is due to the social good component, as could be the case of investors who support companies that take advantage of this new program.

Along with its loan program, Wefunder has also announced a three-month startup-focused startup accelerator program that can help address the problems that will result from the crisis. In particular, they've launched a fairly broad network for the startups they're looking for, from remote collaboration to telemedicine and home schooling, but they will invest $ 50,000 in each company and then help them raise more money through their platform on the day demo.

LEAVE A REPLY

Please enter your comment!
Please enter your name here