What does it mean when an offering is oversubscribed?
An offering becomes oversubscribed once the total offers submitted exceed the equity allocation.
Why do we oversubscribe offerings?
Sponsors require a high level of certainty that committed capital will ultimately convert to invested capital and absolute certainty that 100% of required equity funds by the time of closing. For this reason, CrowdStreet typically pre-approves offers in excess of 5-10% of the total equity allocated to Marketplace investors to account for investor attrition.
What is CrowdStreet's offer acceptance policy?
Each investor's offer will receive a timestamp as soon as they have completed their documents, and CrowdStreet will allow these investors to access funding instructions in that order. 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.
How can I maximize my chance of participating in an offering that is likely to become oversubscribed?
Some offerings have been fully subscribed in under 10 minutes in the past. Other times, it takes longer. To maximize your chance of participating in an offering that is likely to subscribe rapidly, please be prepared to submit your offer as soon as the gold "Invest Now" button becomes available at the exact time stated on the offering detail page. As a reminder, all of the offering documents are available on the offering detail page well in advance of the investment window opening, so that you can complete your due diligence prior to making your decision to invest.
Offers will be pre-approved within a few hours of the investment window opening. When your offer is pre-approved, you will receive an email inviting you to complete your documents. CrowdStreet grants investors access to funding instructions in the order in which they complete their documents (as opposed to the order in which they click the "Invest Now" button). Therefore, complete your documents promptly to maximize your chance of participating in the offering. Ultimately, investments will be finalized on a first-to-fund basis.
I have a scheduling conflict and am not available at the time of offering launch. Can CrowdStreet help?
CrowdStreet is committed to providing a level playing field for all investors. Unfortunately, CrowdStreet cannot place investment offers for investors that are unable at the time of launch, and no offers can be submitted before the "Invest Now" button is activated.
I have invested on the CrowdStreet marketplace XX times in the past. Can I receive a guarantee my offer will be accepted?
Unfortunately, in the interest of fairness to all investors and sponsors, CrowdStreet cannot give preferential treatment to repeat investors. While we value your continued patronage, the best way to gain access will be to submit your offer as soon as the gold "Invest Now" button becomes available. The "Invest Now" button will become available at the start of the webinar.
What happens if and when my offer in an oversubscribed offering is pre-approved?
You will receive an email prompting you to complete documents via DocuSign and then provide an accredited investor verification letter. This article outlines the steps required to complete investment process, and you can learn all about the accredited investor verification process here. Please note that once you submit all of the required documents, it can take 24-48 hours to review and approve your documents, and they will be reviewed in the order in which they were submitted. The last step for you to complete your investment is to fund your offer by initiating the transfer of funds to the sponsor.
Note that for offerings that are likely to become oversubscribed, wiring instructions may be the only option provided. Mailing and ACH instructions will not be available because the transfer of funds can take multiple days via these methods and could risk having your funds returned if the funds arrive after the offering was fully funded.
What happens if an offering falls short of (or exceeds) its fundraising goal?
Please see this article by Ian Formigle, VP of Investments.