Innovation among crowdfunding portals: a PBC that accepts Bitcoin

Innovation in crowdfunding space continues, and I would like to report on two interesting developments.  Both have to do with the crowdfunding portal WeFunder, currently the largest Regulation Crowdfunding portal in the U.S.

First, WeFunder now accepts Bitcoin.  In the announcement in late October, WeFunder explained that the goal is "to make investments easier and cheaper" and to enable investors "to send money from outside the U.S. to bypass having to invest using an international wire transfer."  As confidence in Bitcoin increases, this development can truly facilitate cross border investments and further globalize the investment markets.  Let's see if other portals will follow.   WeFunder is working with BitPay and Silvergate Bank to facilitate this process, and has already had over $50,000 worth of Bicoin come in.

Second, WeFunder is now a public benefit corporation.  Here is an article about it.  WeFunder is the first registered Regulation Crowdfunding portal to do so, but not the first crowdfunding portal all together.  Kickstarter became a PBC in 2015.  WeFunder's charter states that they "aim to increase economic growth and lower wealth disparity, by sharing the rewards of capitalism more broadly, and destroying the barriers that reduce social mobility."  Among its commitments, WeFunder will donate 5% of its profits to programs that mentor more first-time entrepreneurs.  WeFunder is still a for-profit corporation, but now its directors must consider the corporation's public benefit purpose along with its regular corporate goal of generating profit, and report to shareholders regarding its progress in achieving the public benefit purpose.  I previously wrote about Delaware PBC's here.  

Now, a quick update regarding the status of crowdfunding offerings.  According to WeFunder status update, as of November 5, 2016, investors invested $11,782,334 in Regulation CF offerings (that is since May 16, 2016).  So far, there have been 49 successful offerings that reached the minimum funding targets.  Most of the offerings were conducted through WeFunder (34), followed by StartEngine (5) and NextSeed (6).  A total of 13,999 investments have been made.  Three companies raised the maximum of $1 million.

This article is not a legal advice, and was written for general informational purposes only.  If you have questions or comments about the article or are interested in learning more about this topic, feel free to contact its author, Arina Shulga.  Ms. Shulga is the founder of Shulga Law Firm, P.C., a New York-based boutique law firm specializing in advising individual and corporate clients on aspects of corporate, securities, and intellectual property law.