EnergyFunders, an online marketplace connecting investors to oil and gas projects, announced on Tuesday it has closed two projects in Texas that have secured more than $500,000 in less than two months through equity crowdfunding.
In November 2015, EnergyFunders officially launched as what it claims to be the first platform to facilitate global and national participation in deals operated by small and mid-size operators in the U.S. The platform features investments minimums as low as $5,000 per project and provides accredited investors with the ability to buy into higher return, lower risk oil and gas projects. EnergyFunders is also able to facilitate stronger returns in a shorter amount of time by allowing members to invest directly into the wells themselves and bypass the corporate structures which often hinder investor profit margins on oil and gas deals.
Sharing more details about the equity crowdfunding method, CEO of the platform, Philip Racusin, stated:
“What makes this capital structure so unique. [It] is the ability for investors to take advantage of the most powerful tax benefits in oil and gas investing at lower buy-ins and do so with the protection of converting from a general partner to a limited partner once the project work is completed. Although these highly favorable tax benefits were signed into law by President Reagan in 1986, quite a few investors are surprised to discover them for the first time through our platform. No other equity crowdfunding platform offers these advantages.”
EnergyFunders carries interest in each project to ensure its goals are aligned with its investors, negotiates with operators directly and places submitted opportunities through a rigorous vetting process. The platform funded $1.8 million in projects over the past eight months in beta, with multiple projects raising $500,000 each in a matter of hours, and another selling out in less than four hours of going live.
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