Startwise is a crowdfunding platform where businesses can fundraise from individuals using revenue sharing. Startwise is a Funding Portal registered with the U.S. Securities and Exchange Commission (the "SEC"), for the purpose of offering and selling securities in accordance with the exemption from securities registration requirements contained in Section 4(a)(6) of the Securities Act of 1933 and the regulations promulgated by the SEC.
No, Startwise does not require you to be an accredited investor. Any individual who is a United States resident can invest on the Startwise platform.
Investing on Startwise is simple and easy. Once you have registered an account with Startwise, you can access and review potential deals and related documents. When you are ready, simply click on ‘Invest’ to verify your personal information, insert the amount you would like to invest and complete the commitment process.
Committed funds are transferred to an escrow account at a FDIC-insured bank where it will be held until the close of the campaign. The company will have access to the funds only if the amount of committed capital is equal or exceeds the minimum funding goal at the deadline date. If the minimum funding goal is not reached your investment will be returned directly to your bank account.
A revenue sharing agreement is a contract between an issuer and its investors where the issuer is obligated to share a percentage of any gross revenue they generate with their investors (paid quarterly), until a predetermined total amount is reached.
The minimum investment is $200 and the maximum investment within a 12-month period is based on Regulation Crowdfunding depending on your income and net worth.
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Each campaign will be live for a maximum of 90 days. Campaigns can close earlier if the maximum funding goal is met before the deadline date. If a campaign does not reach its minimum funding goal by the deadline date, the campaign is deemed unsuccessful. If the campaign is unsuccessful, the business will not receive any of the investment capital that was contributed, the funds will be returned to the investors and the revenue sharing agreement is not valid.
An investment multiple represents the total amount investors may get back for their investment, inclusive of their initial investment plus any potential return.
For example: A business raises $100,000, and agrees to share 3% of revenue with investors until they earn 1.5x of their investment back. In this scenario, investors would receive 3% of the businesses revenue, paid quarterly, until they have been paid back $150,000 ($100,000 X 1.5x).
Once the investment multiple is achieved, the company no longer has an obligation to its investors.
The percentage of revenue is defined as the total percentage of top quarterly revenue your investors are collectively entitled to. Individually, each investor is entitled to a pro-rata share of the percentage of revenue, based on the amount of money they contribute towards the fundraising goal.
(Investment / Fundraising Goal) x (Top Revenue x Percentage of Revenue) = Investor Payout
If a campaign does not reach its minimum funding goal by the deadline date, the campaign is deemed unsuccessful. The revenue sharing agreement is void, the business will receive none of the investment capital that was contributed and any investor commitments will be transferred back to the investor.
Yes companies fundraising on Startwise has to registered and operating in the US or Canada.
Companies can fundraise up to $1.07 million USD in a 12-month period.
Companies determine the funding deal terms by setting the percentage of revenue to be paid to investors quarterly and the investment multiple that shows the total investment return. Startwise team will provide as much guidance and assistance as possible.
Committed funds are transferred to an escrow account held at a US Bank. Your company can access the funds after the campaign is closed and if the amount of committed capital is equal to or exceeds the minimum funding goal upon the deadline of the campaign.
Payouts to investors are made every quarter in the amount equal to the quarterly revenue percentage promised. The payout to all investors is calculated by multiplying the top revenue generated by the company in that quarter by the percentage of revenue promised (i.e. Top revenue X Percentage of revenue = Investors Payout). Each investor gets own share of that quarterly payment based on the amount of the investment made.
Yes, Startwise facilitates the distribution of the payout among all company investors based on their pro-rata share of the percentage of revenue. You only provide the quarterly sales revenue figure and the Startwise system automatically calculates the fixed percentage payout and distributes it among all your investors accordingly.
Payouts to investors will occur at the end of each fiscal quarter, until investors receive the predetermined investment multiple. Once the investment multiple has been paid, the company no longer has any obligations.