FundersClub, an online capital formation platform that uses Reg D 506b to back promising young firms, has just provided an update on the status of their operations after six years of business. According to FundersClub, to date they have booked 30 exits – IE companies that have been either acquired or gone public.
Of course, having a company exit is an opportunity for investors to benefit from shouldering the risk and supporting these firms.
So how are the returns? FundersClub has a portion of their site that enables users to track returns in comparison to industry benchmarks.
In looking at 2012 vintage investments, the FundersClub portfolio generated an estimated IRR of 39% (as of March 2018).
Jump forward to the 2016 vintage, and the portfolio delivered 20% IRR.
The one off year was the 2015 vintage which shows a -1% IRR.
But investing in early stage companies is risky and it takes time – early stage investing is not for the impatient. What FundersClub does accomplish is that it enables accredited investors access to some prominent names that get backing from some of the biggest VCs.
As for the investor stats, the average investor check stands at $10,368. The average check from FundersClub to a company is $239,130.
Overall, FundersClub has matched over $105 million into 287 startups. FundersClub claims a community of 20,229 accredited investors and they accept less than 2% of the companies reviewed.
FundersClub says that 92% of their portfolio founders would recommend the platform to their network. The average VC gets just 60%.