FundersClub is an online VC that partners with the best entrepreneurs to help them attain success; like other VCs, we do not charge entrepreneurs for taking our capital. 10% of the money that our investor members invest are set aside within a fund to covers legal and accounting costs as an administrative fee (e.g., setting up the fund, annual state filings and taxes, annual tax return preparation for the fund and for every investor in the fund, etc). This fee does not dilute the startup; for example, if $250K is pledged by FundersClub members, $225K is invested in the startup, and $25K is set aside for legal and accounting costs. FundersClub receives carried interest on its investments, which is a percentage of the profits from an investment. We believe this best aligns our incentives with those of both our investor members and our portfolio companies since we have a strong incentive to facilitate successful outcomes for all parties since without such outcomes, we are not compensated.
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