A new way to invest in early-stage companies
Making investments with Netcapital
For you legally to hold securities through Netcapital we need your name, address, phone number, social security number, and bank information. We take extra measures to ensure your data is safe and secure.
You may choose to hold your Netcapital investments in the name of a trust or some other holding entity. In those instances, we will need verification that the holding entity is legally established and that you are authorized act on its behalf. Generally, we require the trust instrument or other formation document.
Protecting your information
As a financial institution, we make every effort to protect your sensitive data. Sensitive data, such as social security numbers or bank account numbers, are encrypted before they ever leave your computer and make their way over the internet to our secure servers. Once the data is in our database, almost nobody within Netcapital has access to it. We never share this information outside of Netcapital except where absolutely required to process your payment or comply with regulations.
All interactions with investors via email are with the email address provided by the investor when creating an account on Netcapital. If discussion is required by phone, it is done by calling the phone number provided with their Netcapital account or a phone number provided from the email account associated with their Netcapital account. We do not disclose full addresses or account numbers when discussing issues on the phone, and require the investor to volunteer that information in order to correct any issues with addresses or account numbers.
Netcapital currently does not charge investors any fee to invest in offerings. If you invest $100, we debit your account for $100 and you own $100 worth of shares at the time of the closing. The company in which you invest pays Netcapital a 4.9% portal fee of the amount raised upon the successful raising of capital through Netcapital. However, if you choose to withdraw your investment commitment, you will receive the balance of your account minus all applicable transaction fees, which includes the 4.9% portal fee.
Netcapital does a direct debit (an ACH transfer) from your checking or savings account. For international accounts we accept payment by wire transfer. If you are paying via ACH transfer, there are no additional fees to investing. If you are paying via a wire transfer, there may be additional fees charged by your bank related to the transfer of funds. In the event that you make a wire transfer, please be sure to talk to your banking institution about any fees involved, so that you can pay any additional transfer fees needed.
For example, if you are seeking to make an investment of $500 in a company by means of a wire transfer and your bank charges a wire transfer fee of $25, you may wish to transfer $525 (your $500 investment target plus the $25 wire transfer fee paid to your bank). Otherwise, you may end up investing only $475 because the $25 wire transfer fee will be deducted from your requested investment amount.
Funds will be debited from your bank account within a few days after you invest. You should make sure there are enough funds in your account during that period.
We use Plaid, Inc., a San Francisco based financial technology (“fintech”) company that builds connections with thousands of financial institutions, to authentic your account that you will link to your Netcapital account. They're a trusted partner to companies ranging from popular fintech applications to Fortune 500 companies and major banks. These relationships require the company to have strong security controls in place, and its platform is regularly audited and tested to ensure its controls meet industry standards. For example, Plaid ensures sensitive data (both in motion and at-rest) is encrypted, and regularly completes SOC-2 audits. When you enter your online banking credentials on the Netcapital site, Plaid establishes an encrypted connection with your bank. This flow was designed with security in mind, as an easy alternative to entering static account and routing numbers that you might need to look up, write down and enter accurately on our site. Once this connection is established, our application receives a token. This token enables us to get the data we need to provide our service without direct access to your bank account or credentials.
We use a system called Plaid to verify ownership of bank accounts to make investments safer. Plaid has connections to thousands of financial institutions, and they add new ones all the time. If you're unable to find your bank, it means that they aren’t yet on that list.
You can still invest by making a wire transfer. Click the wire the money link on the payment step for detailed instructions.
It’s ok to change your mind!
You may withdraw your investment at any time up to 48 hours before the deadline of the offering. You may do so on your investor dashboard. If you choose to cancel or withdraw your investment commitment you will receive back the balance of your account minus all applicable transaction fees, including the 4.9% portal fee.
It typically takes a few business days to receive the balance of your account. If you withdraw an investment within a few hours of making it, it’s possible that the funds will never leave your account. If we have already initiated the ACH transfer for your investment commitment, we need to wait for the funds to arrive, and then process the return of the balance of your account. Please allow up to two weeks for this process.
If, prior to closing the funding, the company you’re investing in makes a material change to the offering terms or other information that was disclosed to you, you will be notified of this change. In accordance with applicable regulations, if you are investing in a 4a6 offering you are given five business days to confirm that you still want to make your investment. If you do not confirm your investment within five business days of that notification, your investment will be cancelled.
Please check with the financial institution that sponsors your IRA to confirm whether Netcapital investments are permitted in your IRA. Some traditional IRAs limit the investment options available to stocks, bonds, mutual funds and certificates of deposit (CDs).
You may want to shop around for a financial institution that offers a self-directed IRA that accommodates available investment options such as the companies offered through Netcapital if you want to be able to invest your retirement assets in companies raising capital through Netcapital.
Yes, every offering on Netcapital has a Q&A forum where you can post questions to the entrepreneur and he or she will respond to your questions through the forum. All communication must occur through Netcapital’s public forum so all investors have access to the same information.