Frequently Asked Questions
Looking for more information?
We’ve prepared detailed FAQ to answer most of your questions.
What is EnrichHER?
EnrichHER unites founders and funders who share a common vision for sustainable women-led ventures. Our EnrichHER Funding platform provides debt-based funding to women entrepreneurs. The EnrichHER Funding portal is set up to leverage additional sources of capital beyond banks and accredited investors by handling funding sources from accredited and non-accredited sources.
How does EnrichHER Funding work?
Businesses seeking to raise capital on the EnrichHER platform will be required to provide relevant market and financial information to EnrichHER. EnrichHER will analyze the business's risk factors and financial condition through our proprietary standardized risk assessment process and propose investment terms to the company. If the company accepts the proposed terms and conditions, it will then create an offering listed on EnrichHER. Investors will be able to sign up on EnrichHER to view offerings and make investments. EnrichHER facilitates monthly payments to investors.
What is a women-led business?
Women-led businesses are companies in which women are in leadership positions and in control of that business, regardless of whether they own 51 percent of the company. Women-led captures the role of women founders in companies that are not majority owners but hold significant equity.
Is EnrichHER Funding registered?
EnrichHER is a Funding Portal registered with the Securities and Exchange Commission (SEC) and a FINRA member following "Regulation Crowdfunding” promulgated to implement Title III of the JOBS Act.
What is Regulation Crowdfunding?
Regulated Crowdfunding provides a framework for registered funding portals such as EnrichHER to operate an online platform for businesses to offer and sell securities in reliance on Section 4(a)(6). Regulations governing the sale of securities is very intricate and known to be very costly and challenging for small businesses or startups to sell securities to the public. The JOBS Act was enacted to provide less expensive alternatives for companies to sell securities through the internet. Section 4(a)(6), in particular, allows businesses to sell securities to anyone, not just investors with a certain level of income and net worth.
Who can invest in businesses listed on EnrichHER Funding?
All US residents can make investments on EnrichHER Funding. You no longer have to be wealthy to have access to investment opportunities other than the public market!
For more informaiton, please refer to the EnrichHER FAQ for Investors.
Do I have to be an accredited investor to invest on EnrichHER Funding?
All US residents can make investments on EnrichHER. You must be 18 years or older and you will be subject to the rolling twelve-month investment limitations of Regulation CF.
Will investors receive any equity interests or any voting or management rights?
Investors will not receive any voting or management rights in a business as a result of their investments on the EnrichHER platform. Investors will not receive equity or any voting or management rights in a business as a result of their investments on the EnrichHER platform
If I don’t get equity, how is this an investment?
Equity is only one kind of investment; there are three main types of investments - equity, debt and cash equivalents. On EnrichHER Funding, you are making debt investments; it's similar to purchasing bonds instead of stocks. Payments to debt investors are typically tied interest rate or total return and allow investors to receive regular cash payments. Payment terms will be defined in the investment contract. Equity investments are considered to be riskier than debt investments because equity investors in a private company usually need the company to go public or get acquired before they receive any payment.
However, despite the fact you will be making a debt investment, there is no guarantee of any payment and you can lose your entire investment. See Risk Warnings.
Who can raise capital through an offering on EnrichHER Funding?
Several types of business are eligible to raise capital through an offering on EnrichHER Funding provided the enterprise meets the specific qualifications outlined in Regulation Crowdfunding and is women-led. These requirements, among others, require that the issuer be:
legally organized under the laws of a state or territory of the United States or the District of Columbia
a company that is not subject to specific reporting requirements of the Securities Exchange Act of 1934
a group that is not an investment company as defined in the Investment Company Act of 1940 or a business excluded from such definition under Section 3(b) or 3(c) thereof
a company (along with its affiliates) that has not sold more than $1 million through Section 4(a)(6) crowdfunding offerings in the previous 12-month period
Does EnrichHER Funding accept any business that applies to list an offering?
No. Each application must meet preliminary business requirements set by EnrichHER and strict legal requirements under Regulation Crowdfunding. Additionally, EnrichHER completes a comprehensive standardized risk assessment of every proposed offering. In some instances, EnrichHER will choose not to list offerings because of the characteristics of the business or the funding request. For example, EnrichHER does not accept a company that promotes offensive behavior (e.g., hate speech, encourage violence toward others) through its business or via the products or services offered for sale.
How are the terms of an offering determined by EnrichHER Funding?
Every business offering undergoes a rigorous standardized assessment process by EnrichHER Funding. The assessment is primarily intended to determine if a prospective issuer fits the business categories offered on EnrichHER, based on the objective criteria established by EnrichHER. If EnrichHER determines a good fit, EnrichHER will help the Issuer define the terms to submit to their prospective investors. When assessing the feasibility of a proposed offering, EnrichHER typically considers the following key factors:
Historical Financial Performance - comparison of key financial ratios to industry standards to evaluate the business’s strengths and weaknesses.
Projected Impact of Proposed Funding Terms - EnrichHER analyzes proposed funding terms' to forecast the potential impact on the business's overall financial condition.
Credit History Information - a credit history evaluation of the business, as well as personal credit histories of key personnel, will be evaluated.
Leadership Experience and Stability - level of industry expertise and length of tenure of the business’s leadership.
Industry Risk - overall success/failure rate in the relevant industry in which the business operates, according to historical data the final investment terms offered to potential investors on EnrichHER reflect EnrichHER's and the issuer’s good-faith assessment and are not a guarantee or guidance of performance of any kind. Investing in securities involves risks, and investors should consider their investment objectives before investing.
Why can only U.S. businesses raise capital on EnrichHER?
EnrichHER Funding operates under Regulation Crowdfunding, which allow only U.S. businesses to raise capital by crowdfunding in the United States.
How much money can my business raise on EnrichHER?
EnrichHER Funding can assist your business in raising $50,000 to $1,070,000 per offering. A business may launch follow-up offerings on EnrichHER but can only raise up to $1,070,000 under Section 4(a)(6) crowdfunding offerings during any 12-month period under Regulation Crowdfunding
Will my business be charged any fees in connection with the payment process?
No fees will be charged to your business for making payments to investors.
What is a revenue sharing note?
Revenue-based financing sometimes referred to as royalty investing or advance revenue purchases, a familiar financing format in oil and gas development, film production, biotech/pharmaceutical development and numerous other industries.
On EnrichHER Funding, you can invest in fractions of a revenue sharing loan. Each portion of a revenue sharing loan is called a revenue sharing note. Instead of requiring a business to pay a fixed amount each month over a specified period (as typically required under a term note), a revenue sharing note on EnrichHER requires a business to pay a fixed percentage of monthly gross revenues until they fulfill a predetermined total amount. The "Total Payment Amount" is calculated by multiplying the principal amount of the revenue sharing note by the applicable "investment multiple."
What makes a revenue sharing note unique?
Revenue sharing notes on EnrichHER is unique because we provide entrepreneurs with capital in exchange for paying a percentage of future revenues to their investors. Investors are technically purchasing a record – a debt security – investors can participate in potential upsides of businesses they invest in. The more investors help the company by buying their products and services or advertising as brand advocates, the more revenue the business will generate and the faster the company will be able to pay its investors. Investors benefit because a shorter payment period increases the investors' rate of return. The flexible payment structure of revenue sharing is directly influenced by the success of the business and helps align the economic interests of the company and its investors.
How is a revenue sharing note different from a traditional term note?
A term note typically carries a fixed interest rate and a monthly repayment schedule with a set maturity date. A business that has issued term notes is required to make fixed monthly payments to its investors irrespective of its operational performance.
In contrast, revenue sharing notes on EnrichHER requires the business to make monthly payments equal to a fixed percentage of its monthly gross revenue until it pays the predetermined total amount. There is also certain risk inherent in revenue sharing notes. See Risk Warnings.
Why should investors consider investing through revenue sharing notes on EnrichHER?
Investors at EnrichHER should consider investing via revenue sharing notes because a revenue sharing note provides payment flexibility to a business based on its performance, payments made to investors will also vary. If the company performs better than expected, the investors will receive recompensation in a shorter period. If the business performance is worse than expected, the investors will receive reimbursement over a more extended period. In each case, the total payment amount is fixed, however, the rate of return on investment can fluctuate. As a result, a revenue sharing note could potentially provide a rate of return similar to an equity investment. The tradeoff is that a revenue sharing note investor forgoes the predictability of fixed payments that are available in a term note investment.
For risks associated with revenue sharing notes, see Risk Warnings.
What can investors expect to receive when they invest through revenue sharing notes on EnrichHER?
Each offering of revenue sharing notes on EnrichHER has a fixed investment multiple, which determines the total return to investors before EnrichHER deducts fees. For example, if the investment multiple is 1.20, that means investors can expect to be paid 1.20x their original investments before EnrichHER deducts expenses.
Note that debt securities offered on EnrichHER are not guaranteed or insured, and investors may lose some or all of the principal invested subject to an issuer’s ability to adequately service the debt and not default.
For risks associated with revenue sharing notes, see ‘Risk Warnings.’
Where is my money held?
For each Loan, an escrow account will be set up to hold funds during the bidding process. This escrow account will be closed at the end of bidding with funds transferred either to the Founder or returned to Funders.
Are there any restrictions on my ability to transfer my investment?
Any securities issued in an offering conducted under Regulation Crowdfunding are subject to a one-year restriction on transfer, unless such transfer is made: (i) to the issuer of the securities; (ii) to an accredited investor; (iii) as part of a registered offering; or (iv) to a family member of the purchaser or certain trusts. The promissory notes issued by companies using our funding portal may contain additional restrictions on transfer. Investments on EnrichHER Funding should be viewed as illiquid investments meaning you cannot sell the securities quickly and there may be no market for the investments when you are able to resell.
What happens in the case of default by a company?
A business loan is considered in “Default” when the borrower has failed to make payments for 121 or more days. The loan becomes “Charged Off” when there is no longer a reasonable expectation of further payments. Charge-off occurs no later than when a loan is 160 days past due or 30 days after the default status is reached.
EnrichHER Funding will not pursue repayment of a loan once it has been declared charged off. Investors will no longer receive principal and interest payments. Investors may seek to recover remaining principal investment and past due interest from the borrower directly.
What is a Form C?
The Form C is a document the borrowing company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Regulation CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered. Investors should read the borrowing company’s entire Form C before making an investment.
What happens if the campaign doesn’t reach its goal?
At the end of a bidding process, the system will calculate which offers have been accepted and which need to be returned. If your bid is rejected, you will receive an email that informs you that your bid was not accepted and your money will be returned to your account. This information will also be posted on your investor dashboard. The money will be transferred via ACH from the escrow account back to your account at the bank it originated from.
What happens if the business misses a payment?
Unless a deferral is permitted by the investor, the payment is deemed to be in default if it is not paid within five (5) days of the due date. If payment is in default, then all unpaid amounts shall be immediately due and payable.
EnrichHER Funding will notify you via email that there has been a late payment. The Late Payment Fee will be prorated and then passes back to you in the next payment cycle.
What happens if the business pays off its loan early?
An issuer may pay off all of a loan in its entirety at any time by paying you any unpaid parts of the repayment amounts for the loan.
EnrichHER Funding will inform you via email and on your investor dashboard that an issuer has paid off its loan. You will receive a second notification via email once the transfer of your principal to your personal or company account has been initiated. This amount will be posted on your investor dashboard as pending until it is transferred.
To what extent does EnrichHER Funding assess each business that applies as a borrower?
Each application must meet preliminary business requirements set by EnrichHER Funding as well as legal requirements under Regulation Crowdfunding. EnrichHER Funding also completes a comprehensive standardized risk assessment of every proposed offering. Based on this risk assessment, EnrichHER Funding considers the company’s historical financial performance, credit history (which sometimes includes personal credit histories of company officers), industry experience of key personnel, and certain indicators of the risk of the industry in which the company operates. Based on this risk assessment, EnrichHER Funding sets the range of investment terms available for the auction.
EnrichHER Funding’s risk assessments are not a guarantee of success. Investing in loans to small businesses is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Before making an investment decision, Investors should review the company’s Form C for a complete description of its business and offering information as well as the comments and responses to questions posted on the discussion page for the offering. Each investor is ultimately responsible for conducting their own independent review of company documentation and perform their own independent due diligence.
Can I cancel my investment?
You are able to cancel your investment, for any reason, up to 48 hours before the offering closes.
You will need to access your investor dashboard to cancel your bid. After you enter a cancellation, the system will immediately cancel your bid. After cancellation, you will be notified via email and on the investor dashboard that your bid has been canceled. If you cancel immediately after you bid, the money will not be transferred to the escrow account. If you cancel your bid after the money has been transferred from your bank account to the escrow account, you will have to wait until the end of the auction to receive your refund.
What is the minimum investment?
The minimum amount you can invest is $100.
Do I need to set up an account on EnrichHER Funding?
All offerings are open to the public to view. You need to open an account and provide information about yourself if you want to invest in a particular offering or participate in the online forum for communication amount investors or with the company. Pursuant to Regulation Crowdfunding, all communications between or among the company and investors regarding the notes offered must be on our site.
An account with EnrichHER Funding enables you to manage and stay informed about your investments and to communicate with issuers and other investors. You do not need to transfer money to open an account. Your money can stay in your personal or company bank account and then you can transfer funds to an escrow account if you make a bid.
If the business is funded and I'm a Funder, how do I get paid back?
The founder will make annual repayments to you until the repayment amount is paid. The repayment amount is based on the revenue share agreement based on a predetermined percentage of the loan. There is no guarantee of any payment and you can lose your entire investment.
The founder will direct payments via ACH from its account to your designated bank account. You will be notified via email when money is transferred and you will also be able to view the status of your investment on your investor dashboard.
How do I invest?
Review the different offerings that you might be interested in, ready the Form C and application documents about the business, investment, and related risks. If you want to invest, take the investor quiz first, create a profile and, upon verification, the investor can make an investment.
EnrichHER Funding will send you a notification via email and post on your investor dashboard the information you will need to initiate your ACH money transfer from your personal or company account to the escrow account. You will receive a confirmation email once your money is deposited into the escrow account.
What updates should I expect after investing?
Under Regulation CF, the company must issue an annual report once a year with financial statements and a discussion of its business, no later than 120 days after the end of their fiscal year; however, there are some limited exceptions. EnrichHER Funding cannot assure that the company will file their annual reports although an issuer to file such reports until one of the following occurs: (i)the issuer is required to file reports under Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, (ii) the issuer has filed, since its most recent sale of securities pursuant to Regulation CF, at least one annual report pursuant to the Section 202(b)(2) of Regulation CF and has fewer than 300 holders of record, (iii) the issuer has filed, since its most recent sale of securities pursuant to Regulation CF, the annual reports required pursuant to the regulation for at least the three most recent years and has total assets that do not exceed $10,000,000, (iv) the issuer or another party repurchased all of the securities issued in reliance upon Regulation CF, including any payment in full of debt securities or any complete redemption of redeemable securities or (v) the issuer liquidates or dissolves its business in accordance with state law. Accordingly, an investor may not continually have current financial information about the issuer. Additionally, the issuer’s obligation to provide financial information to the investor may terminate in the future. Following completion of an offering conducted through EnrichHER Funding, there may or may not be any ongoing relationship between the issuer and EnrichHER Funding.
What is EnrichHER Funding's Compensation Structure?
EnrichHER Funding's compensation structure is as follows:
- Funder Transaction Fee 2%
- Successful Campaign Fee 2-7% depending on the size of the investment.
- Listing Fee $299