Frequently Asked Questions
What is InfraShares?
InfraShares is a startup investing platform providing its members access to vetted investment opportunities related to Smart Cities technologies, Infrastructure assets, and Renewable Energy projects.
How does it work?
- View and gain access to investment opportunities
- Review companies’ offering materials
- Make an investment online
- Simplify and speed up your fundraising process
- Access a network of investors focused on Smart Cities technologies, Infrastructure assets, and Renewable Energy projects.
- Streamline investor pitches, execution of legal documents, and processing of investments
How does InfraShares protect my information?
Your trust in us and the security of your information is core to our business and a top priority at InfraShares.
We adhere to best practices such as browser encryption, store all of our data on servers in secure facilities, and implement systematic processes and procedures for securing and storing data. Communication on the platform is encrypted via SSL during transit and bank level encryption is utilized for sensitive information. We limit access to your personal and financial information to only those employees with authorized access.
Can I invest on InfraShares?
Yes, everyone can sign up on InfraShares and invest. Through our Tittle III Reg CF offerings accredited, AND un-accredited, investors can participate.
What do I need to know about early-stage investing? Are these investments risky?
Companies on InfraShares are high risk opportunities and may not retain their value. Investing in startups and small businesses is inherently risky and standard company risk factors such as execution and strategy risk are often magnified at the early stages of a company. In the event that a company goes out of business, your ownership interest could lose all value. Furthermore, private investments in startup companies are illiquid instruments that typically take up to five and seven years (if ever) before an exit via acquisition, IPO, etc.
When will I get my investment back?
The companies listed on InfraShares are privately held companies, and their shares are not traded on a public stock exchange. As a result, the shares cannot be easily traded or sold. As an investor in a private company, you typically receive a return on your investment under the following two scenarios:
- The company gets acquired by another company.
- The company goes public (undergoes an initial public offering on the NASDAQ, NYSE, or another exchange).
In those instances, you receive your pro-rata share of the distributions that occur. It can take 5-7 years (or longer) to see a distribution, as it takes years to build companies. In many cases, there will not be any distribution as a result of business failure.
InfraShares does not make investment recommendations, and no communication, through this website or in any other medium should be construed as a recommendation for any security offered on or off this investment platform. Investments in private placements and start-up investments in particular are speculative and involve a high degree of risk, and those investors who cannot afford to lose their entire investment should not invest in start-ups. Companies seeking startup investments tend to be in earlier stages of development, and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Additionally, investors may receive restricted stock that may be subject to holding period requirements. The most sensible investment strategy for start-up investing may include a balanced portfolio of different start-ups. Start-ups should only be part of your overall investment portfolio. Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.
How much can I invest on InfraShares? Is there a minimum? Is there a maximum?
Investors may be subject to regulatory limitations on how much they can invest based on their income or net worth. The minimum amount you can invest in a company will depend on the specifics of a given company’s raise.
What are the tax implications of an equity crowdfunding investment?
We cannot give tax advice, and we encourage you to talk with your accountant or tax advisor before making an investment.
I'm not in the U.S. can I invest on InfraShares?
We generally accept all investments, though you may be restricted from investing in certain circumstances depending on the jurisdiction in which you live in and its local laws.
How do I contact the company for diligence and general communication?
To learn more about a company or project, you can review the offering materials on the campaign page and/or visit their website. All questions regarding the offering should be posted in Q&A section of the offering page so that all investors can see the response from the issuer.
Will I receive project updates after I invest?
Because there may not be any relationship between InfraShares and the issuer after the offering is completed, you may or may not receive updates from the project issuer on the status and progress of the project or company. If you do receive updates, you will be notified directly of these updates, and they may be viewed on the project/company itself under the update section.
What does InfraShares consider when conducting due diligence on potential investment opportunities?
We only choose opportunities that pass our thorough screening process. As experts in engineering, construction, and real estate; we have the industry expertise to be able to vet investment opportunities in the Built Environment. Once we determine the Shared Value of a company or project, it must pass our 15 Point Risk Evaluation test to be considered.
Does the investment generate lasting economic, social and environmental benefits by supporting the delivery or operation of public infrastructure?
If yes, then…
Risk Evaluation Test
- Legal – Does the startup/project meet the legal criteria for a regulated crowdfunding offering?
- Fraud | Is there any reasonable basis for believing that the issuer or the offering presents the potential for fraud or otherwise raises concerns about investor protection?
- Management | A background and securities enforcement regulatory history check on each officer, director, and person holding more than 20 percent of the outstanding equity.
- Fact Checking – Is the information presented in the pitch true? Can we verify key facts, contracts, and investments.
- Liquidity | Does the offeror certify that they have enough post-closing liquidity (from the offering and any additional sources) to sustain operations for a specified number of months or a period of time which is clearly identified until the next planned funding round or, if a development project, to complete the proposed phase of the project?
- Financing | How will changes and volatility in the credit and equity markets impact financing efforts and the capital structures of underlying infrastructure investments?
- Leverage | Infrastructure investments may utilize significant leverage which may increase financial and refinancing risks.
- Valuation | Investments and partnerships will be assessed to determine if appropriate and reasonable valuation procedures and methodologies are utilized by managers. Has the issuer provided a reasonable analysis of their valuation when applicable?
- Traction – Has there been measurable progress, growth, and social proof? Is the company backed by other notable investors?
- Team – Does this founder have the skills and vision to succeed? Beyond the founders, does the team have the right people in the appropriate roles—including experienced advisors?
- Business Model | Is the business proposal commercially reasonable? Is there a clear and reasonable explanation of the exit strategy?
- Technology | Is the investment based on un-proven technology and what is the risk associated with new technologies proposed? Do they have any projects completed or are these their first projects? Any proof of concept?
- Market | The infrastructure market is a developing market globally and investment opportunities may be impacted by market supply and demand.
- Political & Headline Risk | Infrastructure investments may involve political activities and may introduce headline risk to investors.
- Regulatory | Changes in regulatory mandates may impact investment returns and strategies.
After completing our due diligence, we will decide whether to offer the company the opportunity to conduct an offering on InfraShares.
Once the proper documentation is prepared, the offering will go live on InfraShares, where we will continue to monitor the campaign and help educate and inform investors.
How do we spot a good opportunity?
We have deep knowledge and roots in the infrastructure development industry and the contech startup ecosystem. Our team’s educational background features some of the world’s best schools, including Stanford, Berkeley, CalPoly and Virginia Tech, and others.
Much of our deal flow comes recommended by our vast network of partners: venture funds, accelerators, incubators, advisors, angel investors and founders networks.
InfraShares is an investor in each startup on our platform—we stand behind our companies and consider them partners. We support them post-fundraise and help with follow-on rounds if needed.
- Notwithstanding the foregoing, these investments are illiquid, risky and speculative and you may lose your entire investment. Additionally, the foregoing process does NOT guarantee that any company will be successful or that you will receive a positive return on your investment.
- The foregoing summarizes our standard process. However, each diligence review is tailored to the nature of the company, so the aforementioned process is not the exact process for every issuer.
- Completing the vetting process does NOT guarantee that the company has no outstanding issues or that problems will not arise in the future.
- While the foregoing process is designed to identify material issues, there is no guarantee that there will not be errors, omissions, or oversights in the due diligence process or in the work of third-party vendors utilized by InfraShares.
- Each investor must conduct their own independent review of documentation and perform their own independent due diligence and should ask for any further information required to make an investment decision.
How can I raise capital on InfraShares?
Founding team members are required to create a personal account on InfraShares. Once you are signed up and logged in, you can apply to raise from our network of investors at https://invest.infrashares.com/en/projects/preproject. If your company is a fit, a member of our Team will reach out to initiate our due diligence process.
How long does it take to raise money?
It depends on the company and not all companies succeed in raising capital using this approach. The time it takes to complete a successful financing can vary widely, but companies should expect that it will take a minimum of 90 days to complete.
When do companies receive investments?
In order to protect investors, companies are required to reach a minimum funding target to have a successful fundraise. Therefore, investments are not finalized until the company raises enough money to meet its funding target and completes all other closing conditions (together, the “closing conditions”). When investments are initiated through the InfraShares platform, the subscription proceeds are held securely in an independent escrow account. Once all the closing conditions have been met, the money is released to the company and investors will receive the applicable securities. If all the closing condition are not met, subscription amounts are returned to investors by the escrow agent.
What happens if my round is oversubscribed?
In the event that investor commitments meet or exceed the InfraShares allocation in the round, other investors will still be able to commit capital to your round. However, you have discretion whether to allow oversubscriptions.
Will my profile be viewable prior to receiving approval to publish?
No, your company’s profile will not be viewable until you have been approved by our Investment Committee, you have completed the Onboarding process, and your company’s profile has been approved by our Principals.
Will my company's information remain confidential?
Information on your company overview pages is available to the public. By design, we encourage social and public consumption of your company’s public content. However, as former investors and entrepreneurs ourselves, we understand the importance of securing sensitive information, so we provide companies with a secure, permission-based, access-controlled system to securely share sensitive content with potential investors for companies raising capital either under 506(b) or 506(c) of Regulation D.
How is the valuation of my fundraising round determined?
A company includes the desired terms of their offering as part of their application to InfraShares. Our internal Investment Committee will review this information and provide feedback to the company, accepting or proposing different terms for the raise.
Alternatively, the company may have pre-existing offline investor traction. The terms established with offline investors, who are often professional angels or venture capitalists, may serve as the basis of the valuation and terms offered to online investors on InfraShares.
What does it cost to be on InfraShares?
InfraShares will pay certain upfront costs related to escrow, operational, due diligence, and legal fees (reimbursed at closing). We only make money if your fundraise is successful:
- $0 retainer
- 6% placement fee on funds raised through InfraShares ($37,500 assuming $500,000 raised).
- 2% equity fee (on the same terms as the round) on funds raised through InfraShares ($25,000 assuming $500,000 raised).
How can I communicate with investors on InfraShares?
Under 506(c), Reg A+, and Reg CF, general solicitation is allowed and is a great way to convert customers into investors in your company. There are a number of tools built into the InfraShares platform that will allow you to connect and communicate with potential investors and upon launching, a member of the InfraShares investment team will opportunistically attempt to provide warm introductions to value-add investors.
Does my company have to be incorporated in a specific state or with a particular structure?
We work with companies of multiple structures (C-corporations and LLCs for companies incorporated in the U.S.A.) and they can be organized in any state. However, we only work with companies organized in the U.S.A. and Canada currently for offerings under Regulation A and companies organized in the U.S.A. for side-by-side offerings (Regulation D + Regulation CF). Companies looking to raise under Regulation D only may be organized outside of the U.S.A.