Lustro allows you to sort and filter hundreds of equity crowdfunding (CF) deals offered by CF Portals across the United States.  We gather as much basic data as possible about the company and release basic Company Summary pages for each Reg CF issuer.  When you find a deal you like you can click through to their Company Summary page, review their details, and if you'd like to learn more you can easily link over to the crowdfunding platform that the offering is listed on so you can make your investment.  Lustro also incorporates insights from the “Crowd” so investors can share due diligence reports on deals.

Unlike shares of public companies, securities purchased under Title III may not be transferred or sold during the first year of ownership unless they are transferred or sold:

• Back to the issuing company
• To an accredited investor, as defined by the SEC
• As part of an offering registered by the SEC
• To a member of your family, as defined by the SEC
• To a trust you control or to a trust created for the benefit of a member of your family as a result of your death or divorce

These laws and rules are changing rapidly though, stay tuned for updates!  Secondary markets have already begin to spring up and we're keeping a close eye on them to learn more as things develop.

The companies that are raising funds are typically privately held companies and their shares are not traded on a public stock exchange.  As a result, the shares cannot be easily traded or sold, at least not right now.  As an investor in a private company you will typically receive a return on your investment if:

• The company gets acquired by another company
• The company goes public

These returns can take years to materialize as it takes many years to build a viable business that is acquisition-worthy.  In many scenarios you will not receive a return on your investment as a result of business failure.  Investing in early-stage companies is risky and many will not find success.  The ones that do, though, are often massively successful.

With this said, there are a variety of security types that are structured so that investors receive returns earlier.  An example of such a type of security would be a revenue sharing agreement.  To learn more about the different security types please continue reviewing our Education section.

• If either your annual income or your net worth is less than $107,000, then during any 12-month period, you can invest up to the greater of either $2,200 or 5% of the lesser of your annual income or net worth.
• If both your annual income and your net worth are equal to or more than $107,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is lesser, but not to exceed $107,000.

Anyone can invest. However, certain deals are limited to “Accredited Investors” An Accredited Investor is defined by the following requirements: 

• Has an individual net worth, or joint net worth with your spouse exceeding $1 million (excluding the value of one's primary residence)
• Has an income exceeding $200,000 in each of the past 2 years and expects the same this year

Depending on the crowdfunding platform you invest through their can be fees to your investment:

• SeedInvest:  2% non-refundable processing fee (up to US $300) per investment. (unless funding isn’t raised and then you receive the fee as a refund)
• NextSeed: No fees on investments unless you open up a NextSeed IRA account
• StartEngine: Most investments are free to investors unless company opts to offset the costs by having investors pay a percentage in the form of a processing fee. This fee will be charged to investors on top of the price of shares. Your total amount charged and shares will be stated clearly on the investment form as a 2.5% processing fee.
• WeFunder: For Regulation Crowdfunding, Wefunder charges investors up to 2% of their investment (minimum: $7, maximum: $75)..
• Republic: Free for investors.
• MicroVentures: Free for investors.

Investing in startups involves considerable risks, including the possible loss of your entire investment. For a list of primary risks associated with a Title III investment click here.

It varies depending on each funding platforms policies, most will allow you to cancel your investment up until 48 hours prior to the funding campaign deadline.

Under Title III, a company can raise up to $1,070,000 in equity crowdfunding in any 12 month period.

• SeedInvest: 7.5% placement fee; charged on the total amount raised on SeedInvest in the round, paid only upon the successful completion of your offering. 5% warrant coverage or equity; based on the total amount raised on SeedInvest in the round. Up to $0 - $10,000 in due diligence, escrow, and marketing and legal expense reimbursements.
• NextSeed: There is no charge for registering with NextSeed and completing the application process in order to find out potential funding terms. If you decide to proceed with creating an actual offering, their partner bank and escrow agent, GoldStar Trust Company, will charge a one-time $500 escrow setup fee. You may also incur 3rd-party fees, such as for a CPA, architectural renderings, videos and other business costs. NextSeed charges a crowdfunding fee equal to 10% of the total amount raised (subject to discounts if you bring your own investors), payable only if your offering is successful.
• StartEngine: It is free to launch. You only pay their 6% rate if you raise money.
• WeFunder: It is free to create a profile and start collecting followers. When you decide to turn on fundraising, WeFunder charges a $195 fee. For Regulation Crowdfunding raises, Wefunder charges up to a 7% fee based on your online funding total, only if your funding is successful. Any additional payment processing fees are paid by investors. If your Regulation Crowdfunding exceeds the $1,070,00 cap, WeFunder will spin up a Regulation D raise for accredited investors free of charge.
• Republic: Companies pay only if they successfully reach their funding goal: 6% of the total funds raised in cash, and 2% as a Crowd Safe. Companies raising on Republic may also use the proceeds of their successful financing to pay for the escrow agent and other transaction-related fees.
• Microventures: $99 application fee, $250 due diligence fee, and 5% of the total amount the company raises

If the company is fundraising with Regulation Crowdfund, than the company must hit the funding target to be funded. However, a company is allowed to accept oversubscriptions if they fulfill their funding goal.

Regulation A fundraises are targeted for more established companies looking to use the funding for growth. Regulation A fundraises are also marketable to all investors, regardless of the accreditation status. Regulation CF offerings are typically earlier stage companies because they are limited to a smaller capital raise. Regulation CF raises are required to be marketed through a registered funding portal, however, Regulation A fundraises have no such requirements. Under a Regulation D offering, a company has no maximum limitation on fundraising however they are only able to market to accredited investors. You can find more info on this topic here.

No, Regulation Crowdfunding laws only allow for companies located in the United States to participate in raising money.

A company that is raising funds through Title III will need to apply to a specific funding portal and provide the funding portal with certain information and disclosures. From here, the funding portal will conduct due diligence on the company to determine if they want to accept this company and allow them to fundraise on their portal.

Must fundraising portals allow for companies of all structures (C-corporations, S-corporations and LLCs). Preferences for company, industry, and location vary on each funding portal. Also not all funding portals allow companies to offer any type of security, these securities also change with the specific portal.