Investor Frequently Asked Questions

What is investing in startups through crowdfunding about?

Crowdfunding is an exciting new investment opportunity that allows everyone to invest in new businesses that they like and feel have what it takes to go the distance (certain restrictions apply). In equity-based crowdfunding, the investor receives shares of the business in return for a monetary investment. If the business is successful, the investor will share in that success and make a profit. However, there are risks. If the business fails, – as many startups and even existing businesses do – you will lose any money you invested in that business.

How do I know the business I am investing in is legitimate?

Disclosure and communication are the h3est investor protections in crowdfunding. There are multiple tools you should make use of: (1) WorkforceSoftwareSolutions has developed a thorough vetting process; only businesses surviving that process will be allowed to post profiles on WorkforceSoftwareSolutions.com, (2) review the information that businesses provide to the SEC (linked on our website), (3) investors should carefully review all information regarding the reputation, expertise and experience of the project’s management team and (4) investors should also actively interact with other investors and the project creator to have questions answered before they part with any money. 

Is it profitable to invest in startups?

It can be, but there are no guarantees. That's why it's not only important to do your own research but to use a reputable crowdfunding portal that vets opportunities. Many people like the idea of being involved in the startup process as well as providing financing. 

What are the benefits of investing in small businesses?

Some investors like the chance to be involved in the Next Big Thing, both through their financial stake and the opportunity to guide the entrepreneur. It can be exciting to watch a fledgling business grow and develop and to get credit for helping that happen. Additionally, it can be satisfying to be supporting entrepreneurs and the U.S. economy by contributing to the creation of new businesses. About 65% of new jobs are created by these small businesses. 

Is it safe to invest in a startup?

In a nutshell there are definitely risks when you invest in a startup. No one can predict with any certainty which business will succeed and which will fail, so you should not invest any money you can't afford to lose. Even if a business is a success, it might not be able to distribute profits immediately, as excess funds might be best used by reinvesting in the business. All investments have risks; that's why you need to learn as much as you can. There will be some safeguards put in place by the SEC, but the real burden is always upon the investor. 

Why should I invest in a startup?

When an entrepreneur starts a new venture, he or she usually needs a little bit of money to turn the idea into the beginnings of an actual business that can reach out to customers and later-stage investors. Depending on the business, this money – known as seed capital – might allow the entrepreneur to build a minimum viable product (technology startups), buy equipment (manufacturing startups), lease space and acquire inventory (retailing startups) and so forth. Every startup is different, but as the costs of starting a business have come down drastically due to the Internet and other technological innovations, an increasing number of entrepreneurs find that a little bit of seed capital can get them a long way. 

How do I use WorkforceSoftwareSolutions to invest in businesses?

WorkforceSoftwareSolutions allows you to learn about startups that are looking for funding, invest in the ones you like and keep an eye on your investments' growth. 

What do I get in exchange for backing a startup?

This is equity crowdfunding, so you will receive actual shares of the business depending on your level of investment.  

Does WorkforceSoftwareSolutions vet the businesses that are seeking funding through the platform?

Absolutely. We carefully review all the information provided by the startup along with documentation submitted. We also run a criminal background check on each member of the management team. The businesses that we allow to post profiles have met our basic criteria. Of course, the best vetting is always done by the crowd, so we strongly encourage you to communicate with other people who are also considering investing in that business as well as the entrepreneur. WorkforceSoftwareSolutions has the tools that allow you to do that easily and quickly.  

Will WorkforceSoftwareSolutions give me advice about which startup to choose?

No, we leave the decision to you, the investor. We provide you with as much information as possible, including background checks on the business owners and a legal review, but we can't guide you beyond that. The real power of crowdfunding is in the crowd itself. You will have ample opportunity to engage in conversations with the business owner and other investors before you make your decision to fund.  

How much will I be able to invest in equity-based crowdfunding?

That depends. If you are an accredited investor (net worth of $1 million or more or annual income over $200,000), you can invest 10% of your annual income or net worth, up to a maximum of $100,000 within a 12-month period. If you are an unaccredited investor (annual income under $100,000), you can invest either $2,000 or 5% of your annual income or net worth, whichever is greater. These limits were set out in the JOBS Act to protect investors.  

How do I determine my net worth?

It's easy. Add up all of your net assets and subtract your liabilities. Do not include your primary residence, any insurance rights under contract or any benefits that will not be payable until termination of service, retirement or death.  

Who determines how much equity I receive for my investment?

Each business which lists on WorkforceSoftwareSolutions will post a valuation, which is the amount it believes it is currently worth. If a business values itself, for example, at $250,000, an investment of $2,500 would buy one percent of the business. A $25,000 investment would equal ten percent equity.  

How do I actually transfer the money and get started on investing in a startup?

Once you create an account at WorkforceSoftwareSolutions and answer a few questions about the type of investor you are, you'll be ready to invest. We have complete instructions on our website.  

How safe is the money I have in the third-party escrow account?

The escrow account is much like one used when you make a deposit on a house. The money is in a special dedicated client account and only released if the Target Raise is met. If the target is not reached, the full amount you transferred will be returned to you. This escrow account, which is the same type of account that a law firm uses to hold money on a client's behalf, is not held by WorkforceSoftwareSolutions. Nor are your funds accessible to WorkforceSoftwareSolutions or the business until the funding has closed and all the paperwork has been completed.  

What if I decide to discontinue my crowdfunding campaign?

You can cancel your WorkforceSoftwareSolutions campaign at any time. If you cancel your fundraising campaign, you have two options under the Invest Georgia Exemption or Reg D:
(1) You can return all investor funds (must be a 100% dollar-for-dollar refund); or
(2) You can keep the funds you have raised as long as this decision does not conflict with the disclosures provided in your Issuer Application. You should also explain to your investors how you will be able to execute your business plan with less than the original Target Raise. Keep in mind that if you should choose to keep the funds you raised, you must pay WorkforceSoftwareSolutions's commission according to Schedule A of the Investor Agreement.  

If a business receives full funding, is it definitely going to happen?

Not necessarily. There are certain legal requirements to be met during the closing phase. If any unresolvable problems occur, then the funds will be returned to investors. This is another way of protecting investors.  

Is my investment public knowledge?

That's up to you. You have the ability to set your personal investment profile to "private" if you don't want other WorkforceSoftwareSolutions members to see it. The startup owners, however, will know who you are. 

What is WorkforceSoftwareSolutions?

We give everyone – regardless of wealth – the opportunity to invest in startups. Previously, only investors of certain means could participate. Now it will be open to anyone. WorkforceSoftwareSolutions will be bringing you the most diverse and exciting new businesses in which to invest.  

When can I start investing?

That depends. If you are an Accredited Investor (please see our questionnaire), you can start now. If you are not accredited, you'll have to wait until the SEC finalizes their rules for crowdfunding. If you create an account, we'll definitely let you know when you can get started!  

I'm Already Part of an Angel Investor Group, Why Should I Care About Equity Crowdfunding?

There are a number of reasons you should care. Through equity crowdfunding, you will have access to deals that are both in and out of your geographic area. Equity crowdfunding frees you from the structure and constraints existing in angel investor groups. Through equity crowdfunding you can invest as much or as little as you want, or not at all and can probably be the "lead" investor if you choose. Also, you can see a high quantity of deals in very little time, simple by browsing companies on WorkforceSoftwareSolutions. Give equity crowdfunding a shot.  

Invest Georgia Exemption (IGE) For Investors

How much can I invest in a company that is using the IGE to raise funds?

If you are investing in a business participating in the IGE, you may invest no more than $10,000 if you are an unaccredited investor (annual income less than $200,000). If you are an accredited investor (annual income greater than $200,000 or net worth greater than $1,000,000), there is no limit to how much you can invest.

If I am unaccredited investor, can I invest in companies through WorkforceSoftwareSolutions now?

Yes. If you are a legal resident of the state of Georgia, you can invest in Georgia businesses now, even if you are not accredited. Just follow these steps:
- Sign up on WorkforceSoftwareSolutions.
- Create an Investor Profile.
- Sign our Investor Agreement (electronically).
- Check our companies and invest.

Why am I required to provide my Date of Birth (applies to Georgia Residents Only)?

If you would like to be approved to review Georgia-based deals under the Invest Georgia Exemption, WorkforceSoftwareSolutions needs to confirm that you are a bona fide Georgia resident. WorkforceSoftwareSolutions uses a multi-part confirmation process which includes comparing your Date of Birth to information in public records databases.

Can anyone invest in companies listed on WorkforceSoftwareSolutions that are designated as IGE?

No, only legal residents of Georgia can invest through the Invest Georgia Exemption.

If I participate in an IGE offering and later move outside of the state of Georgia, would I lose the shares I purchased?

No, you would retain your shares as long as you were an actual, bona fide Georgia resident at the time the securities were offered and sold to you.

What are the advantages of investing in companies that are participating in the IGE?

If you meet the requirements, you can invest now, while Title III crowdfunding is not yet up and running. You can support new companies and start-ups and help stimulate the Georgia economy Through the Georgia Angel Investor Tax Credit, accredited Georgia investors who purchase shares in early‐stage, start‐up companies in Georgia can receive a tax credit of up to $50,000 annually when they provide capital for start-up companies in exchange for equity.