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How to Invest Through CrowdStreet Video Transcript

Hello, and welcome to Crowdstreet. In this video, we will cover: 

  • Investor requirements to invest
  • Accreditation and how to verify your accredited status
  • How to create and set up your CrowdStreet account
  • A brief overview of different investing accounts
  • The Offer Process and what to expect when making an investment

Disclaimer

First, a disclaimer. CrowdStreet is not a registered broker-dealer, investment advisor, or crowdfunding portal and therefore cannot provide investment advice. None of the information contained in this presentation may be construed as investment, legal, or tax advice. CrowdStreet does not endorse any of the opportunities that appear on the CrowdStreet website, nor does CrowdStreet make any recommendations regarding the appropriateness of particular opportunities for investors. Investing on the CrowdStreet Marketplace includes a high degree of risk, including risk of entire loss of investment. Users and investors should consult with their respective investment advisers, attorneys, and tax advisors concerning each investment opportunity, carefully review all documentation concerning each investment, and seek clarification on any questions or concerns of a particular investment opportunity prior to investment. Past performance is not a guarantee of future results. No advisor-client relationship may be formed absent a written, executed advisory services agreement with CrowdStreet Advisors, and without such an agreement, nothing herein may or should be construed as investment advice.


Investor Requirements

To invest through the CrowdStreet Marketplace, you must fulfill the following requirements:

  • Be a U.S. Citizen or Resident 
  • Meet U.S. accreditation requirements
  • Comply with AML/KYC laws

If you are not a U.S. Citizen or Resident, but would like to invest via a U.S.-based entity (either a corporation or an LLC), that entity must:

  • Meet U.S. accreditation requirements
  • Comply with AML/KYC laws
  • Be taxed in the US as a corporation or a partnership (but not be a disregarded entity)
  • Have a U.S. taxpayer ID
  • Draw on a U.S. bank account

Accreditation Requirements

In this next section, we will cover accreditation: the requirements to be accredited, and how to prove your accredited status. To comply with SEC regulations, CrowdStreet investment opportunities are only accessible to accredited investors through our secure and private platform.


The definition of “accredited investor” is found in Regulation D promulgated under the Securities Act of 1933. There are several different ways to be qualified as an accredited investor, including but not limited to: 

  • Individuals having a pre-tax income exceeding $200,000 annually ($300,000 per couple) with the expectation of that continuing in the next year
  • Individuals having a net worth of more than $1 million, excluding the value of the primary residence.
  • Individuals holding certain professional certifications, designations, and licenses in good standing (Series 7, Series 82, Series 65 holders)
  • Entities owning more than $5,000,000 in “investments” 
  • Entities in which all equity owners are accredited
  • Trusts with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the subject securities whose purchase is directed by a “sophisticated person” as defined in Regulation D.

Proving your Accredited Status

To prove your accredited status to CrowdStreet, you need to provide a letter stating that you are accredited.


The SEC states accreditation must be verified within 90 of the offering by a registered wealth advisor, licensed CPA, or licensed attorney. 


For this reason, the CrowdStreet Investor Relations team is not a qualified party. 


After confirming your status, the reviewer should provide written confirmation. The letter or template must:

  • Explicitly state that the investor is an accredited investor as defined in Rule 501(a)
  • Be dated within 90 days
  • Be signed by a licensed CPA, licensed attorney, or registered wealth advisor, and list the issuer’s qualifications (i.e. license number and state of registration)

CrowdStreet has a template that you can use. It is linked in the transcript below.


Verifying your Status to CrowdStreet

There are two ways to verify your status to CrowdStreet.

  • Upload your letter from your CPA, wealth advisor, etc. mentioned before
  • Use our third-party partner, VerifyInvestor, free of charge. 
    • Note that it can take up to 48 hours for VerifyInvestor to send you a letter. But this will not affect your ability to invest in a deal.

You do NOT need to have both a letter from your CPA or a letter from VerifyInvestor. We recommend getting a letter from a qualified third party, but VerifyInvestor is there as an option in case your accreditation letter is older than 90 days and you do not have time to meet with a qualified third party.


The letter does not have to be from VerifyInvestor (we just won’t pay for it). Letters from Parallel Markets, for example, are also accepted.


If you are the sole owner of the entity investing, the letter can be for yourself as an individual but you must upload the entity’s formation documents indicating the ownership rights.


If you are investing jointly with your spouse, both parties need to be listed on the letter. 


If you are investing through an entity with multiple owners, either the entity must be accredited or ALL owners must be accredited. You cannot submit a letter for only one of the owners or three out of four. 


You cannot obtain a letter from your bank simply stating your current account balance. The issuer must be a qualified party and must state that you are an accredited investor per Rule 501(a). 


If you are a qualified party, you cannot sign your own letter.



Creating an Account

Let’s go over how to create an account. You cannot view the details of Marketplace deals unless you have an account.

  • First, go to crowdstreet.com.
  • In the upper right corner, you will see a gold button that says “Create an account.” Click on it.
  • You will then be taken to a signup page. Fill out each section with the appropriate information.
    • Note that you MUST be an accredited investor to participate in CrowdStreet Marketplace deals.

Once you have created an account, you will be able to view the details of Marketplace deals. However, it is recommended that you fill out your profile information at this time.

  • To do this, look to the upper right-hand corner of the page. You will see something that says “Hi, Your Name.” As you can see, for me, it says “Hi Becky.” Click on that.
  • This will provide you with a dropdown menu. Click on “My Account.” This will take you to your “My Account” page.
  • Once there, you will see options along the left-hand side. 
  • The profile section is where you will input personal information, such as  your legal name, email address, mailing address, SSN, etc. Don’t worry - your information is secure.


Investing Accounts

To create an investing account, click on “investing accounts” in the navigation

There are several different types of accounts you can invest through. The information needed by CrowdStreet to use those different accounts varies. However, our most popular types of investing accounts are:

  • Individual
  • Joint
  • Trust
  • IRA
  • LLC

To create an investing account, click on “+ add an investing account.” You will then need to fill in the required information. Again, the information that you will need to provide will vary depending on the account type. But in this example, this is the information that you would need to provide for an individual account. 

What is important to note is that if you are investing through a joint account, not only will you need to list each member here, but also EACH member will need to have their own CrowdStreet account. 


Other important notes related to accounts:

  • It is important to ensure you are choosing the correct account type. Be sure to consider all options before making a selection. 
  • For Joint Accounts, each investor will have their own CrowdStreet login and member profile and then share an investing account.
    • For an IRA, it is important to follow the naming format and instructions found in the Help Center. 
  • Ensure the Legal Name is correct. This is not a nickname field.
    • For an Individual, this should be your name as it appears on your government-issued ID
    • For Joint Account, this should include both investors’ names.
    • For an entity, this should be the name as it appears on the Articles of Organization
  • While not required for all offerings, it would be best to upload a copy of each investor’s government issued ID now so that it is on file and your offer process is not delayed  in the future. You can do so under “account members”
  • While not required for all offerings, it would be best to upload your entity’s formation documents now so that they are on file. This could prevent future delays during the offer process.

  

Offer Process

I will now  show you the steps of our offer process. I will be using a tutorial offering to demonstrate this. Therefore, this is not  actual information, but rather a representation of a fictional investor's offering.


Before we begin, here are some important times to note in the offer process:

  • 10:00 AM PST - when the webinar begins
  • 10:30 AM PST - when offers can be submitted
  • 5:00 PM PST - when closing documents can be submitted

Document submission date and time will be used to decide  when, or if, your offer will be authorized to fund.

There are four main steps of the offer process: Offer submission, Account Selection, Signing Documents, and Funding

Once you have reviewed the offering details and are ready to submit an offer, click the gold “Invest Now” button to start the offer process.


Submit Offer

  • Here is the offer submission page. 
    • In the upper left corner is a tracker to show where you are in the offer process
    • If you would like to review knowledge articles related to submitting an offer you can click ‘Need Assistance?’
  • Here is where you will  fill in an offer amount. Specific guidelines regarding the offer amount can be found next to where you input your offer amount
  • Next, you review disclosures & disclaimers and check acknowledgements associated with this offer. 
  • When you are ready you can progress to the next step by clicking the blue  ‘Submit Offer’ button. 
    • In this example, the minimum investment amount is 1 dollar. So that will be my offer submission. 
  • So I have filled in my offer amount and have acknowledged the disclosures and disclaimers. Thus, I can move on to the next step and view the Offer Summary Page.

Offer Summary Page

On the offer summary page, you will see your offer status and what’s next.

  • Along the bottom is the tracker that shows the steps in the offer process.  Each step will show whether it has been completed via a green checkmark, or if further attention is needed. 
  • For my offer you can see that the offer amount is 1 dollar,  and that I am ready to select an investing account for this offer, also known as an investing entity. 
  • At this time, I will proceed by clicking on the blue  ‘Get Started’ button below the Account section and selecting my Investing Account that will be associated with this offer.

Account Selection

  • Choose the eligible investing account you would like to use to make your investment
    • Please note: Accounts can only have one in-progress offer per offering. The account name will be greyed out and disabled when an offer is already in-progress, and you will not be able to invest again with that account until the offer is fully invested.
    • Additionally, there may be restrictions set by the Sponsor on the types of accounts you can use to invest, e.g. SD-IRAs. Those accounts will be greyed out and disabled.
  • Once you select your investing account, the account information will appear below.  Confirm that the account information is correct.
  • Once you have confirmed all the information is correct, click the ‘Submit’ button in the lower right corner.
  • If the account information has any missing or invalid information, click on the edit button of the section you would like to edit (it looks like a little pencil)
  • You will then be brought to a new screen where you can fix the information. Once done, click the ‘Return to Offer’ button
  • Confirm the new information is correct, and then click ‘Submit.’

Offer Summary Page

At this point you have submitted your offer and associated the investing account. 

  • In this example, you can see that my Account has been submitted and is under review. Review does not need to be completed prior to moving to the documents step. 
  • Now, I will wait until the designated time to sign documents. This is usually 5 PM, PST. I will be notified via email once I am able to sign documents.
  • It is now the designated time. Before, the documents step was greyed out, but now it’s blue.
  • At this time, I will go ahead and move to the documents stage by clicking the blue ‘Get Started’ button.

Signing Documents

  • Once you are in the documents section, You can click the button next to “E-Sign” to digitally sign documents via our third party provider, DocuSign. 
  • Optionally, you can download and sign documents to upload at this step. 
    • Please note that if you are investing via an SD IRA, you cannot use Docusign. You will need to download and sign documents. The document process is offline as we cannot configure Docusign  and our workflow to meet each Custodian’s specific requirements.
    • You will need to download the document and submit them to your Custodian for their review and approval. 
  • Once they have countersigned, please upload the fully completed package to your offer. 
  • If your Custodian requires any additional information for their review, please reach out to help@crowdstreet.com
  •  For investing accounts  with additional signatories,  the additional signatory must log into their account to execute their portion of the closing documents. 
    • Once the first signatory has completed their e-sign, an email will be sent to the next signatory asking them to login to complete their portion. 

  • Completed documents will be available on this screen for review or you can return to the Offer Summary Page.

Once documents are signed, CrowdStreet Investor Relations will review based on the date and time your documents were submitted. Document submission date and time will be used to decide  when, or if, your offer will be authorized to fund. Please allow 24-48 hours for our Customer Relations team to review documents.

  • If the offering becomes oversubscribed, investors who do not complete their documents promptly will be moved to a waitlist, while the investors who have completed documents have the opportunity to fund.
  • Ultimately not all investors who submit offers will be able to invest in an offering that is oversubscribed. Investments will be finalized on a first-to-fund basis from among the offers where investors completed documents soonest.

Offer Summary Page

  • Back on the offer summary page, you can see that my documents are complete and under review. 
  • Once documents are reviewed, you will see a green checkmark. This means that your documents have  been reviewed and you are approved to progress to funding. 
  • You can access Funding instructions by clicking on the blue ‘Get Started’  button beneath the Fund Section. 

Funding

  • The funding instructions page shows  funding requirements as well as funding methods. This example offering is configured for ACH funding only.
  • After you select the funding method and remit funds it is important that you confirm funds have been sent. You would do so by clicking the blue ‘Confirm Funds Sent’ button and filling out the appropriate information. This will alert CrowdStreet and the Sponsor to watch for and mark funds as received. 
    • Note that if you are investing through an SD-IRA, your custodian will need to send the funds.
  • Following your confirmation of funds being sent, the sponsor will confirm receipt, countersign your closing documents, and finalize your investment.
    • Note that it can take 2-5 business days for the sponsor to confirm that funds have been received.

Once the sponsor has countersigned documents, and all steps of the process are complete, you will see a green checkmark at each step. You will now be able to view your investment in your Portfolio.


Portfolio

The goal of the Portfolio page is to give investors insight into their investments made through CrowdStreet and access to reports. You get there by logging into CrowdStreet and clicking on “Portfolio” in the navigation.


To see more details about a specific investment, you will go to the investor room. 

On the top left, you will find:

  • The name of the investment
  • Which investing entity you used to invest
  • The date you invested

If you would like to message the CrowdStreet team, or the sponsor, you click on the ‘Ask a Question’ button.


Once you complete an investment on the CrowdStreet Marketplace each deal has a dedicated Investor Forum, which is a message board for investors in the same deal to communicate with each other. If you would like to view the investor forum for this investment, you would click on the ‘forum’ button. 

  • Besides messaging other investors in the deal, investors can post questions about their investment, and some sponsors use the forum to communicate updates. 

If you would like to view the original offering details page, you would click here on ‘View Offering’

This is also where you would access your tax documents in the documents section.


Conclusion

This has been a brief overview on how to get started with CrowdStreet. In this video, we covered:

  • Investor requirements to invest
  • Accreditation and how to verify your accredited status
  • How to create and set up your CrowdStreet account
  • A brief overview of different investing accounts
  • The Offer Process and what to expect when making an investment

If you have any questions, please do not hesitate to reach out to help@crowdstreet.com