Legal Guide

So, You Need to Raise Capital

Why use Regulation Crowdfunding
Fill Out an Application to Begin
Take the Hassle out of Fundraising
Guidelines to Follow
  • Maximum Funding Amount. You can raise up to $1,070,000 using Regulation Crowdfunding. On our platform the minimum amount must be $25,000.
  • Investment Limits. Investors can invest a minimum of $100 or up to a certain percent of their income, which we track on your behalf. The limits are:
  • All investments must go through the Wunderfund portal. The SEC requires that all investments of your offering be made through the funding portal, which means you cannot take an offline check from an interested party. You’ll have to point those potential investors to the Wunderfund for their investment.
  • Advertising Must be Based on Fact. When it comes to promoting your offering you can use all types of marketing tactics, whether it’s social media, email, or telling your friends. Bear in mind though, everything you claim must be based on facts and must linked back to you campaign page. For instance, you cannot claim to be the "BEST widget maker on Earth."
  • Be Upfront with Investors. Avoid making any misleading statements about your company or do not intentionally omit information that affects an investor's decision. You should be be forthcoming about any legal issues you may be dealing with. The more information the better, because anything construed as misleading or missing may cause your application to be denied or your campaign to be suspended/removed.
  • Reporting Requirements. After your fiscal year end, you’ll be required to file an annual report to update your investors. This is an important compliance measure if you ever wish to raise more money using Regulation Crowdfunding in the future. We’ll send you a reminder when the time comes.
  • Shareholder Limits. We set a limit to the number of unaccredited shareholders you can take so you stay under the thresholds that trigger compliance requirements. This is meant to minimize the burden of SEC reporting.

Investment Offering Contracts

  • Promissory Note. This functions like a standard loan, and works for going businesses with the cash flow.
  • SAFE Agreement (Simple Agreement for Future Equity). This offers investors the opportunity to buy equity in your company at a later date with a discount. This is suited for fast moving, high growth, early stage companies who expect to be acquired or go public with an IPO.
  • Investor Perks Agreement. This offers perk incentives such as products, discounts, or some form of credit to your investors. It’s meant to be combined with one of the investment offerings.

A Promissory Note

Suited for Businesses Generating Cash Flow
Standard Terms
  • Interest Rate - Percentage set per annum.
  • Revenue Percentage - This is the percentage of revenue that you’ll use to payout investors during each payment period. You should set it at a reasonable percentage that allows you to operate with enough cash flow.
  • Maturity Date - Set at a 5 years default. Date is adjustable.
  • Payment Schedule (Annual, Quarterly, or Monthly Payments) - Set to annual by default, though you can elect to make quarterly or monthly payments instead.
  • Governing Law - Set to your home state by default, but may be any state.
  • Defer Payments - The default is set to one, allowing you to defer at least one payment without being in default. This allows you to recover in the event of having a bad year or quarter (Can be adjusted upwards).
  • Optional Clauses:
  • *Note, if you decide to modify any of the clauses, you may want to consult with your lawyer.

Revenue Loan Agreement

Best for Businesses with Going Revenue
Standard Terms
  • Gross or Net Revenues - Gross includes all your revenues, while Net revenues backs out any returns and shipping costs.
  • Revenue Percentage - This is the percentage of revenue that you’ll use to payout investors during each payment period. You should set it at a reasonable % that allows you to operate with enough cash flow.
  • Repayment Amount - You can set this anywhere from 1.5-3.5x of the investment, this is the maximum amount you have to pay back.
  • Quarterly or Annual Payments - You may choose an annual or quarterly payment periods.
  • Defer Payments - The default is set to 1, allowing you to defer at least 1 payment without being in default.
  • Secured - You may choose to secure the loan with the business property of the business.

The Wunderfund SAFE

Suited for Early Stage Companies Who Expect to Raise Future Rounds of VC Financing
Why is the SAFE Preferred over a Convertible Note?
How does the SAFE work for Regulation Crowdfunding?
  • Investors Follow Investment Limits - Every investor has to indicate whether they are accredited or unaccredited, and must to comply with the investment limitations of SEC Regulation Crowdfunding. Major investors are those who invest more than $25,000, and minor investors are those who invest less.
  • Designate One Lead Investor - One lead investor will be designated as a representative for all investors, and all the other investors must agree to allow that person to make decisions on any amendments if needed. Importantly, this lead investor must be accredited, and be a Major investor.
  • Give the Company Repurchase Rights. The company can repurchase an investor's SAFE at an appraised fair market value prior to a conversion to equity. If the company is seeking institutional financing, this minimizes any potential concerns that could arise from venture capitalists.
  • The CEO is Given the Power of Attorney. Upon the conversion to equity during the financing event, all the Minor investors (i.e. non-accredited investors) will grant the CEO the PoA to vote on their behalf and sign off on any documents. This way, the company doesn’t have to get hundreds of signatures.

Standard Terms
  • Valuation Cap - The Valuation Cap indicates to the investor what the equity is priced at when subsequent financing occurs. The lower the valuation cap, the more equity an investor is able to purchase. Valuation caps depend on the type of business and can range from $2 million to $20 million.
  • Discount Rate - The default rate is set at 0%, but can be adjusted up to 20%. It works by giving investors a discount on the share price as an incentive for investing early.
  • Shareholder Threshold - We set a threshold of $25,000. It’s designed to give accredited investors (or major investors) voting rights in the business when they invest at this level.
  • Pro-Rata Rights - The default is to give major investors (i.e. those investing $25,000 or more) pro-rata rights, which gives them the right to maintain the same ownership percentage in later financing rounds.
  • Governing Law - The state you are incorporated in is set as the default, but you may change it to any state you prefer.
  • Delay Conversion until IPO or Acquisition - The default is set for the SAFE to convert to equity at the first priced round. You do have a choice to delay the conversion to equity until IPO or acquisition.

The Perks Agreement

Standard Terms
  • Credits Available - The default is to offer credit equivalent to 100% of the investment amount. However, we encourage you to put in the appropriate amount of credit suitable to the investment amount.
  • Lifetime of Credit - We set a default of 2 years so the investors have a window to use their credits. Think of it as an expiry date.
  • Customer Discount (Optional) - Offer a percentage discount.
  • Lifetime of Discount (Optional) - If you give a discount, we set a default of two years.
  • Special Terms & Instructions (Optional) - You’ll need to explain any limitations if any as well as detailed instructions on redemption.
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