You want to invest in Wayfund startups? Here's what you need to know.
You must have been a Wayfair W-2, full-time employee, either former or current to invest.
You are an accredited investor and willing to "pledge" a dollar amount in the case there is a company you decide you want to invest in. Wayfund does not hold the money. You are under no obligation to invest the money. It's simply a show of good faith. To learn more about this, see details on the Apply to Invest page.
You are willing to commit your expertise if needed.
We’d like our members to pledge a dollar amount they are willing to invest into Wayfund companies over the course of 2020. The average pledge commitment right now is $30,000. Your pledge can be as little as $5,000 or as high as you’d like (our largest pledge right now is $100,000).
What’s the process? How does it work?
Startup informs the Wayfund they are looking to raise: A startup who decides to raise capital will inform the Wayfund via the Wayfund Newsletter and slack that they are planning to raise investment. They will give a date that they will be pitching the Wayfund via a Zoom meeting (for those who want to join online to hear the pitch) as well as a physical meeting (for those who want to join in person).
Startup pitches Wayfund members: A startup that is looking to raise capital will pitch to the Wayfund. They will speak about their company, their team, the amount of capital they are looking to raise, timelines, current investors, etc, etc.
Question gathering: After a startup pitches, a form will be sent out to everyone asking people to ask any questions they’d like to have answered. All questions will be aggregated by Durkin and given to the startup to answer. Those questions will then be answered and sent around to the group.
Formal investment ask: All interested members will then be asked if they’d like to invest.
Commitment: Wayfund members who would like to invest, invest. They will own an equity position in the startup upon formation of the syndicate and closing of the docs.
Formation of the Syndicate: A syndicate for the investment will be formed via Angel List (by Joe Noonan and Ryan Durkin of the Wayfund Steering Committee). You will be listed as a member of that LLC and you will be asked to commit money to pay for the Angel List syndicate setup fees based on the % of your investment of the total pie. Angel List syndicate setup costs $8,000. If you committed $10k of a $100k investment, you will pay $800 towards the $8k setup. It's a one time fee and that's it. Other than that, there are no other expenses. Angel List and Joe and Ryan will handle the annual distribution of K1’s and Angel List handles the annual filings.
Closing & Wiring of Funds: We’ll close the round, send each person the necessary paperwork documenting their financial involvement in the LLC, and each person will wire the startup their money. You now own a % amount of the company.
“Event” (Company Acquisition / Sale / IPO / Close): Upon an “event” you will either make money or lose money. At the end of the day, it’s another way to round out your portfolio, but you need to be comfortable with the fact that angel and venture investing is risky. If the company is a home run and your equity is a gain, the startup founders and the LLC administrators (Joe Noonan, Ryan Durkin, and likely others) will ensure that funds are distributed in the correct amount to each person.
What is the Wayfund Mission?
Our mission is to support 100+ Wayfair alumni founders by EOY 2022.
What are our Values:
Founders / Operators first.
We use our brains.
We are never done.
We are transparent.
What is the 60-second Wayfund elevator pitch?
Wayfund was started by former and current Wayfair employees, interested in supporting startups founded by former Wayfair employees. We want to help spur innovation among this smart, big thinking, hard working base of employees. This is a place to help provide capital, mentors, recruiting support, discounted services, and advice to these Wayfair employees. Just like the original PayPal mafia, we have an opportunity to help support hundreds of new companies. Let's do this.
I’m interested in being part of the Wayfund, how do I get in?
Two key reasons: (1) We want to ensure that members are pledging investment dollars or 12 hours per year of time (and ideally both) to our startups. We want to build a community to become engaged, active members. (2) The larger the group gets, the more it is to manage. Right now, due to limitation on steering committee time, we will have to control the growth of the fund.
What is a syndicate?
A syndicate is a VC vehicle created to make a single investment into a company. Investors can apply by applying to back a lead or investing in a fund. https://angel.co/syndicates
What is the lowest amount I can invest?
I’ve been asked to “pledge” money to the Wayfund. What does that mean?
Definition of "Pledge:" You must be willing to pledge a dollar amount you're willing to earmark to invest in a company, should there be company that interests you enough to invest. Note:
We are not holding the $.
People are under no obligation to invest the $.
It’s simply a show of good faith.
This is NOT a traditional "fund." You can help by offering dollars and/or advice to companies. You can decide which companies you want to invest your in, and which ones you don't. You will be able to invest on a per deal basis as an individual, or if the investment round gets large enough we'll use one LLC to serve as the syndicate (to make it easier for the entrepreneur). Have more questions, ping Ryan Durkin.
Do I need to be an accredited investor to invest alongside the Wayfund?
Yes. You must be an accredited investor. In the United States, to be considered an accredited investor, one must have a net worth of at least $1,000,000, excluding the value of one's primary residence, or have an income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year. The term "accredited investor" is defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission (SEC).It is YOUR responsibility to ensure you are accredited. Wayfund holds no responsibility in determining your eligibility with regards to accreditation.
What is our investment thesis / focus?
Thesis: Investing in Wayfair winners will produce winning companies. If Wayfair is as good as we think it is, and the people as good as we think they are, we should be able to produce a disproportionate amount of wins in Boston.
Stage: Pre-seed to seed. I want to message this harder/more on the website.
Investment size: Our average checks range from $500k-$250k+ increments.
Investment industry: We are founder first and industry agnostic. We slant consumer simply due to the makeup of our members, but our disciplines span a wide range of expertise. Yes, we have strong ecommerce, operations, logistics, and service leaders, but ultimately what unites us is that Wayfair founder. We want to stand behind the absolute best Wayfair entrepreneurs before they’re ready for that institutional round. (Founder Collective does an amazing job with messaging this: https://www.foundercollective.com/)
Who can I turn to from the Wayfund Steering Committee for help?
First off, all of us are more than welcome to help you. Here are some specific areas of focus we each have to help divy responsibility:
I don’t have hundreds of thousands of dollars to invest, can I still join?
Provided you are accredited, you can invest as little as $5,000 into a startup via the Wayfund.
How do I know that I’m investing in a good idea?
Angel and venture capital investing is very risky. And every investor has their own idea of what criteria they use to assess the probability of success. Ultimately, people who are a part of Wayfair are ultimately betting first and foremost on their fellow former coworker / Wayfair alumni. There are some validation points that you may find valuable like: who the lead investor is, their growth rate, key hires they’ve brought into the business, etc, but ultimately it’s your responsibility to figure out whether you think an investment is good or bad for you.
What kind of investments will be available?
Most investment opportunities that come to the Wayfund will likely be in the range of $50k - $250k and will allow multiple people to invest. As a result, my current guess is that the average investment from a Wayfund member will be between $10k - $25k.
All investments will be official by creating LLC’s for each syndicate. Ryan Durkin and Joe Noonan (steering committee members) will take lead on setting up the Angel List syndicate. If you have any questions about this, ping them and ask.
How do I learn about investment opportunities?
Ryan Durkin sends out a monthly newsletter. In that newsletter will include any upcoming investment opportunities, information about the company, save the dates (date of the pitch via Zoom online meeting, date the investment is due, etc). Fear not. We will overcommunicate these opportunities.
How often do members meet?
We will hold a quarterly event, which will be unique each time. Stay tuned for the next calendar invite.
I connected with a company that I’m excited about and I’d like to invest. What are the next steps?
Any opportunity you are interested in investing in, please let Joe Noonan and Ryan Durkin know so that they can help you through the process and make sure all paperwork is done correctly.
What is a K1?
The Schedule K-1 is an Internal Revenue Service (IRS) tax form issued annually for an investment in partnership interests. The purpose of the Schedule K-1 is to report each partner's share of the partnership's earnings, losses, deductions, and credits.
Disclaimer: Wayfund is not a venture fund, an investment bank, a broker dealer, investment clearing-house, or an investment advisor, but rather a forum in which investors may be educated about aspects of investment and business, as well as introduced to companies for possible investment. Wayfund is not registered with the Securities and Exchange Commission or any state securities commission. Each member of Wayfund is responsible for his or her own investment decisions, and Wayfund is not recommending any particular company for investment. All investments in startup companies involve a high degree of risk, and investors should be able to bear the risk of complete financial loss. The choice to use and the manner of utilization of information and knowledge gained through Wayfund are each member’s individual and personal choice. No guidance shall be given, nor shall any person affiliated with Wayfund (or Wayfund itself) be responsible for an individual member’s use of the information, investment decision, or the results of any investment. Wayfund does not conduct any investigation to verify the factual information submitted to potential investors by individual entrepreneurs, and Wayfund makes no representations or warranties regarding these companies. Investors must conduct their own due diligence and negotiate the terms of any investment they elect to make.
The Wayfund Created By Wayfair People. For Wayfair People. If you'd like to get involved, let us know. Email: email@example.com