Terrafugia Seeks New Small Investors
Federal rules that limit how people can invest in startups recently were changed, making it easier for small investors to buy shares, and Terrafugia has taken advantage of that by posting a new investing opportunity on the funding site Wefunder. Terrafugia launched the Wefunder page in late September, CEO Carl Dietrich told AVweb on Monday. "To date, Terrafugia has been entirely funded by large 'angel investors' who have been in a position to write pretty large checks, but there are a number of accredited investors who are interested in investing smaller amounts," Dietrich said. "It has not made sense in the past to allow very small investments (for logistical/voting reasons), but Wefunder groups lots of smaller investors into one fund which then gets one vote -- minimizing the logistical overhead for us."
According to the Wefunder site, "accredited investors" are wealthy individuals with assets over $1 million and high incomes. "Crowd investors" are everyone else. Currently, only accredited investors are allowed by federal law to invest in startups, but a new law that takes effect next summer will allow everyone to invest. Crowd investors will be limited to risking no more than 10 percent of their income. Both types of investors can use the Wefunder site. "The Wefunder page is an experiment to find out how significant such a source of 'crowdfunding' might be for us," said Dietrich. "We are optimistic about the potential, but unsure about the reality." The Terrafugia offer so far has garnered more interest than any other offer on the site, Wefunder founder Nick Tommarello told CarTalk blogger Jim Motavalli. Dietrich said so far no money has changed hands, "So the jury is still out!"