Frequently Asked Questions
For Investors -
If you're looking to invest in your first opportunity or refresh yourself on how Mainvest works, please read through the following information about our platform. For businesses, please scroll down to the second half of the page.
What is Mainvest?
Mainvest.com is a website where you can browse opportunities to lend money to small businesses.
What Kinds of Businesses?
We try to focus on local, brick-and-mortar businesses, possibly a business in your neighborhood that you already know.
Who Can Invest in these Opportunities?
Anyone can invest, as long as you’re 18 or older and have a U.S. bank account.
Are there Fees to Joining?
No, it’s absolutely free for investors to join.
Do I have to Join?
You can browse the investment opportunities and read questions and comments in our chat rooms without an account, but to actually make an investment or participate in the chat rooms, you need to create an account.
Why Would I Invest In a Small Business?
We believe the investments offer attractive potential returns while enabling you to support businesses in and around your community, rather than mega-corporations and international behemoths.
Is This a Crowdfunding Site?
Yes. All of the opportunities at our site are offered under Section 4(a)(6) of the Securities Act of 1933, which is often referred to as “Regulation Crowdfunding” or “Regulation CF” or “Title III Crowdfunding”.
Aren't there Other Kinds of Crowdfunding?
Yes. The JOBS Act of 2012 created three kinds of offerings, all of which are sometimes referred to as Crowdfunding. The third kind is Regulation A issued by the Securities and Exchange Commission, often referred to as “Title IV Crowdfunding” or “Regulation A” or “Regulation A+.”
Is this like Kickstarter?
No! In Kickstarter, you make donations to businesses and get nothing in return other than “rewards” (e.g., a backpack, new watch, etc.). On our platform you are actually investing in securities. A business can choose to offer several different types of securities on Mainvest. Generally, an equity security represents an ownership interest in the Issuer, while a debt security represents a loan that the Issuer will pay back over time, plus interest.
What's an Accredited Investor?
If you’re an individual, you’re an “accredited” investor if any following describes you:
Your own income has been at least $200,000 for each of the last two years and you expect it to be at least that much this year.
Your combined income with your spouse has been at least $300,000 for each of the last two years and you expect it to be at least that much this year.
Your net worth is at least $1 million, excluding your primary residence.
You are designated as an "Accredited Investor" by SEC rule.
You do not have to be an accredited investor to invest on Mainvest.
Does Mainvest List Every Business that Applies? If not, How Does Mainvest Decide Which Companies to List?
No, we don’t list every business that applies. We base our decisions on certain proprietary benchmarks, the business’s eligibility as defined through the FINRA and SEC regulatory framework, and also our own, subjective view of the business and its management team. You can learn more about how we decide which companies to list here.
YOU SHOULD NOT INTERPRET THIS AS INVESTMENT ADVICE. WE ARE NOT INVESTMENT ADVISERS.
Is the Information I give to Mainvest Secure?
Yes. We use SSL (Secure Sockets Layer) for security by making an encrypted link between your browser and our associated servers. SSL is an industry standard for protecting the integrity of online transactions.
Are these Safe Investments?
No, these investments are inherently risky. All of the opportunities on our site are small businesses with limited resources. Some are unable to borrow money from banks or other traditional sources. It is very likely that some of the companies listed on our site will fail to repay their loans. These opportunities are only for investors who can handle losing some or all of their investment.
Is this Like Investing in the Stock Market?
It’s similar only in the sense that you are investing in a business. Otherwise, it’s very different:
The businesses you see on our site will be much, much smaller than those listed on public stock markets, with a much higher risk profile.
Businesses listed on public stock markets have gone through a rigorous process with the SEC before being listed. Businesses on our site have gone through no such process.
By listing on a public stock market, a business typically gains access to broad and deep sources of capital. The businesses on our site have no such access.
Businesses listed on public stock markets typically have a seasoned, professional management team. Most of the businesses on our site are run by the founders.
What are Some of the Risks of Investing?
Our Educational Materials list some of the generic risks of investing. The information each business provides should also include business-specific risks.
Where Can I Learn More about the Businesses?
When you click on a business, you’ll see a lot of information right away. For more information, you can navigate to financial information, business plans, risk factors, certain SEC filings, and other detailed information. You can also use the chat room to ask questions directly to the owner of the business.
How Will I Report my Income for Tax Purposes?
In most cases, you will report your income as interest (Note: this only applies to debt investments). You should consult the terms of the securities in question with your tax advisers for more information.
Does the Government Review these Investments?
No. No Federal or State agency reviews, approves of, or endorses these investments. You and your advisers have to make the decision whether to invest.
How Much Should I Invest?
That’s entirely up to you and your investment advisers. As a general matter, most people recommend a balanced portfolio that includes both low-risk and high-risk investments, with the right mix based on lots of factors including your age and your own tolerance for market fluctuations. As you consider how much to invest, you should definitely think of the projects on our site as high-risk investments.
By law, we are required to limit how much you can invest in Regulation CF offerings. When you create your account, we’ll ask for your annual income and net worth, which tells us how much you can invest. For more information, see our Educational Materials. If you're an unaccredited investor, you can invest at least $2,500 depending on your income and net worth.
Are there Minimum Investments?
The business itself will stipulate a minimum investment in each project, usually $100.
How Should I Choose Between All the Businesses on the Site?
We are not investment advisers and are not allowed to provide investment advice. If you’re not sure, you should consult with your own financial and investment advisers.
If I Invest in One of These Businesses, Do I Become Personally Liable For Anything?
No, not at all. You are personally liable only to make your investment in the amount you designate.
What will I Own if I Invest?
You will own a security in the Issuer on the terms described in the offering. There are many different types of securities, so it is important to review the terms thoroughly before making an investment.
If the Business is Very Successful, Will I Make a lot of Money?
It depends on the kind of investment you make. If the investment is a debt-based, the most you can generally receive is your money back, plus interest. If the investment is equity-based, you could earn more.
Will Anyone Guarantee my Investment?
You should review each investment opportunity in detail to determine if the investment is secured or if there is a guarantor.
How do I Pay for my Investment?
By a direct transfer straight from your linked bank account.
Where does my Money go when I Invest?
Your money is held safely in an escrow account (which we don’t control) until the project is fully subscribed, i.e., until the full amount is invested. Then, it is distributed to the sponsor of the project, less our fee. If the project is not fully subscribed, your money will be returned to you without any deduction.
Can I Cancel my Investment?
Yes. You can generally cancel at any time until 48 hours before the offering deadline established by the business, or if there is a material change in the Offering during the term. Some offering that are conducted on an expedited basis due to COVID-19 may have more restrictive terms. You should carefully review these offering for specific cancellation terms.
Can the business Cancel my Investment?
Yes. The business has the right to accept or reject investments in its sole discretion. But once the business accepts your investment (and takes your money), it cannot cancel.
Can the Business Change the Amount of my Investment?
If more investors sign up than the business needs, the business will usually have the right to reduce the amount invested by each investor (how the reduction will be applied will be disclosed for each opportunity). The business will never have the right to increase your investment.
Can I Invest through my IRA?
Usually, yes. We highly recommend you consult your financial advisors prior to withdrawing funds.
Will I be Able to Sell my Revenue-Sharing Note?
Generally speaking, no. For one thing, there won’t be an active market, meaning you probably won’t be able to find any buyers. For another, the business might restrict your ability to transfer your promissory note. Finally, any transfer of your promissory note would have to comply with the securities laws.
Can I Track the Performance of my Investments?
Yes, we give you a tool – we call it our Dashboard – to keep track of all the investments you make at our site.
For more information, view our Support Center, Educational Materials or contact us at email@example.com.
How do I Raise Money for my Business on Mainvest?
The first step is to create a business account, which takes about five minutes. Our team will then guide you through the application process.
Is there an Application Fee?
No, it’s free to apply to raise. Mainvest does not charge an upfront fee to launch most campaigns. Equity raises and some fringe cases may carry an upfront fee.
What's the Maximum I can Raise on Mainvest?
The most you can raise using Regulation CF is $5,000,000, while there is no limit to the amount you can raise using Rule 506(c). With that being said, the majority of small businesses raising money on Mainvest will raise between $50,000 and $500,000.
There are different thresholds that impact the regulatory requirements needed to raise capital. There are no additional regulatory or disclosure requirements to raise up to $124,000. Additional disclosures (such as a CPA reviews and audits) begin over $124,000 and $618,000. Contact your Mainvest representative for more details.
Does Mainvest Restrict how I can Use these Funds?
No. However, you disclose how you intend to use those funds as part of the offering. While things may change, it is important to keep investors up to date so that they can make informed decisions.
Do I have to sell equity?
You can raise money on Mainvest in a variety of ways, including revenue-sharing loans. As the issuer of securities, you have control over the terms for your specific offering (e.g. maturity date, interest rate, etc.)
Terms should be set to allow the business to grow and succeed while generating returns for investors.
Will I have to Pledge Collateral in my Offering?
That’s up to you. You can (1) personally guarantee the loan, (2) pledge collateral, or (3) offer no security interest at all.
Will I have to Personally Guarantee The Securities?
No, but you may elect to do so. Currently, our Revenue-Sharing Notes require no personal guarantees.
What are your Criteria for Listing an Offering?
We base our decisions on certain proprietary benchmarks and also our own, subjective view of the business and its management team.
How Long Will it Take Mainvest to Decide Whether or not to List my Offering?
Generally, you’ll know within five business days, but feel free to reach out to your sales contact to learn more.
Does Mainvest Purchase these Securities?
No, we are only an intermediary in the process. Investors purchase the securities with their own money.
If Mainvest Accepts my Application, am I Guaranteed to be Funded?
No. If we accept your application, it just means your offering will be listed on the site.
What Kind of Investors will Register on your Site?
Anyone can register and invest, as long as he or she is 18 or older and has a U.S. bank account.
Can I ask my Customers to Participate?
Yes! You have to be careful how you advertise, but you can direct your customers to our site, where they can decide whether to participate in the offering. Your MainVest Business Dashboard also provides tools and resources to help get the word out.
What Kind of Information will I have to Provide?
The SEC requires that you provide lots of information about the business, including financial information.
Will the Information I Provide be Confidential?
No, the whole world will be able to see your information on our site.
How Long does the Process Take, from Start to Finish?
There are two phases, the Set Up phase and the Live phase.
During the Set Up phase, you work with us to fill out and file the proper regulatory disclosures, identify the proper structuring of the investment security you will be offering, and design your offering page. That usually takes 15 - 30 hours over 1 -2 weeks.
The Live phase starts when your offering goes live and ends when (1) you’ve raised all the money you’re trying to raise, or (2) the duration of the offering ends, typically 30 - 90 days.
Does the Government have to Approve these Loans
No. No Federal or State agency reviews, approves of, or endorses these investments.
How do you Make Money?
We have a detailed explanation of our compensation structure in the Educational Materials. And for each offering we will disclose exactly how much we are being paid.
For more information, view our Support Center, Educational Materials or contact us at firstname.lastname@example.org.