Netcapital

Netcapital Funding Portal Inc. is a real, SEC-registered funding portal and FINRA funding-portal member, and every offering on it has an SEC Form C behind it: AltStreet counted 473 offerings since 2016. Investor money sits in escrow at Luminate Bank until an offering closes. The concerns are about the company that runs it and about outcomes. The parent, Netcapital Inc. (Nasdaq: NCPL), discloses going-concern doubt. In August 2026 the SEC sued it and individual defendants, alleging about $14 million of revenue from 2021 to 2024 was improperly recognized; those are contested allegations. Its auditor has since resigned, and four years of audited statements are withdrawn pending re-audit. A platform can be legitimate and still be a weak place to hold investments for years; judge each offering on its Form C.

No. NCPL is the Nasdaq-listed stock of Netcapital Inc., the parent company that owns the portal; its price, reverse split and the shareholder class action concern that company. Investing through netcapital.com means buying securities of the startups listed there, held for you by a custodian. A startup on the portal does not rise or fall with NCPL's share price, although the platform you rely on for records and communications is run by NCPL's group.

The SEC's complaint is against Netcapital Inc. and individuals connected to it, over the parent's own revenue accounting. It does not accuse the companies raising money on the portal. Its practical relevance to portal investors is continuity: the wallet, dashboard, custodial record-keeping and investor communications run on the parent's infrastructure, and the parent is short of cash, delinquent on its annual and quarterly reports, and funding itself with short-term notes. Your securities are issued by the startups, so a failure of the parent would not cancel them, but servicing them could become harder.

Request it from the dashboard, with three conditions from Netcapital's help center: a photo of a government-issued ID and a selfie of you holding it on every request; the funds must have been in the wallet for at least 60 days; and the money goes back only to the bank account it came from (for a wire, you must prove the sending account). Because refunds of non-card payments are credited to the wallet rather than your bank, canceling a commitment can leave cash in the wallet subject to these rules.

Yes, until 48 hours before the offering deadline, from your investor dashboard; after that the commitment is final. Refunds typically take a few business days; if the ACH debit had already started, Netcapital asks you to allow up to two weeks. Card payments are refunded to the card, other payments to your Netcapital wallet, and the card convenience fee (2.9% plus $0.30, or 3.9% for international cards) is never refunded. Netcapital also says it may retain the 4.9% portal fee if a withdrawal request is not made at least 48 hours before the withdrawal deadline. If the company makes a material change to the offering, you have five business days to reconfirm or the commitment is canceled.

An offering closes only if it reaches its minimum, the SEC target amount. If it does not, Netcapital says all funds are returned to your account. The goal shown on the page is usually the maximum, which most offerings do not reach: the median observed raise is about a tenth of it. Once the minimum is met, the company may close early or in rolling closes, taking money before the deadline on five business days' notice.

Each offering sets its own minimum, some as low as $99; the minimum for international investors is $300. Anyone 18 or older can invest at least $2,500 a year in Reg CF offerings, and non-accredited investors above that face limits based on income and net worth, up to $124,000 a year across all portals. Investors outside the US may invest where their local laws allow, paying by card, wire or wallet transfer (ACH is for US bank accounts only). Accredited investors can also buy in side-by-side Rule 506(c) tranches.

Netcapital charges investors no fee to invest. Card payments carry a processor convenience fee of 2.9% plus $0.30 per transaction (3.9% for international cards), kept by the processor even if you cancel, and banks may charge for wires. ACH from a US bank account costs nothing. The companies pay Netcapital: a $5,000 listing fee, 4.9% of the amount raised and, since fiscal 2025, 1% in their own equity.

Netcapital says it reviews each offering before it is posted and conducts background checks on many of the people involved, as Reg CF requires of funding portals. It also says you 'must rely on your own examination of the company' and that it 'is not responsible for any losses'. It does not set or recommend share prices. The census shows what passes the screen: two-thirds of offerings came from companies reporting no revenue.

The documented ones are in court filings and Netcapital's own pages rather than review sites. The SEC's August 2026 complaint and the October 2026 shareholder class action concern the parent's accounting and stock. For portal investors, the recurring issues the record shows are a secondary trading feature marketed since 2023 and now unavailable, refunds credited to a platform wallet with a 60-day withdrawal hold, a custodian that holds and votes the shares, and companies that stop filing annual reports, a reason the parent itself gave for writing down issuer stakes. AltStreet found no FINRA disciplinary action against the funding portal.

Netcapital publishes no returns, exits or failure counts for past offerings. Some companies that raised there went on to larger rounds, such as EnergyX before a $50 million Series B, but a later round is not a cash return to Reg CF holders, and AltStreet found no completed exit in the filings that paid them. The parent's own books point the other way for part of the ecosystem: it wrote down $19.9 million of stakes in fiscal 2025, including companies that had raised on the portal, citing reasons such as 'cessation of operations'.

That is the main way a Netcapital investment returns cash. Because a custodian is the record owner, the proceeds or new shares would pass through the custodian and transfer agent to you as beneficial owner, under the terms of the deal and your security. Netcapital says a company must disclose an exit in its annual report. Keep your own records of each position so you can establish your interest.

On EDGAR: Reg CF companies must file an annual report (Form C-AR) unless an exemption applies, and some stop. Companies may also send updates through Netcapital at their discretion. Netcapital provides no interim statements or valuations, and Rule 506(c) tranches carry no ongoing SEC disclosure duty. Your share count is on your dashboard.

Netcapital is a Regulation Crowdfunding portal where anyone can buy equity, usually common stock or LLC membership units, in early-stage private companies, typically from $99. Netcapital Funding Portal Inc. is an SEC-registered funding portal and FINRA funding-portal member; each offering files an SEC Form C with disclosure and financial statements. You commit funds online (ACH is free; cards add a 2.9% + $0.30 non-refundable convenience fee), the money sits in escrow at Luminate Bank until the offering clears its SEC target, and at closing your securities are issued to a custodian that holds them on your behalf while you receive a beneficial interest. Across the 473 offerings AltStreet reconstructed from SEC filings (2016-2026), the issuers are very early: 66% of offerings came from companies reporting zero revenue and the median team is 3 people. Investors should also know that the platform's parent company faces an unresolved SEC civil fraud action filed August 10, 2026 (contested allegations), see the enforcement question below.

None directly, and that is genuinely cheaper than the major alternatives. Netcapital states it 'currently does not charge investors any fee to invest in offerings'; Wefunder charges roughly 2% and StartEngine charges 3.5% on many offerings. Two costs still reach you: credit/debit card payments carry the processor's convenience fee of 2.9% plus $0.30 (3.9% for international cards), which is non-refundable even if you cancel your investment; and wire transfers may incur your bank's fees. Pay by ACH and you pay nothing. The company you invest in pays Netcapital a $5,000 listing fee, 4.9% of everything it raises, and, since fiscal 2025, an additional 1% success fee paid in the company's own equity, which means Netcapital holds stakes in the issuers it lists.

You own a beneficial interest, not record ownership of the shares. Under Netcapital's Record Ownership and Voting Agreement, a custodian, Cust Corp, a Delaware corporation, is the sole legal and record owner of every security purchased on the platform and appears as the holder on the issuer's books. Your beneficial ownership is recorded by a transfer agent, Equity Stock Transfer LLC, or a successor, under Netcapital's current (2023) Record Ownership and Voting Agreement; archived agreements for older offerings name Worldwide Stock Transfer LLC, so the agent for your position may depend on when the offering ran. Where a security carries voting rights, the custodian votes them 'in a manner reasonably determined to be in the best interest of Investor', you do not cast the vote yourself. You keep the economic benefits (sale proceeds, any distributions), and statutory rights that many jurisdictions extend to beneficial owners, such as books-and-records inspection and appraisal rights under Delaware law, subject to conditions, remain available, though exercising them through a nominee is more cumbersome than as a record holder. If record ownership and direct voting control matter to you, this structure is not built for that.

Practically, no. Reg CF securities are restricted from resale for one year (with limited exceptions such as transfers to accredited investors or family). Beyond that, Netcapital's long-promised secondary market does not currently operate: the company signed an ATS agreement with Templum Markets in January 2023 and launched a closed beta in July 2024, but its parent's FY2025 10-K states development and roll-out are 'paused,' and the site's transfer page says the secondary transfer features are 'temporarily unavailable' with no timeline. Plan on holding until the company is acquired, goes public, or fails, potentially many years, or indefinitely. Three different things get called 'getting your money out', and only one works today. Selling shares after closing: no venue operates. Canceling a commitment during an offering: allowed until 48 hours before the deadline, from the dashboard. Withdrawing cash from the Netcapital wallet: allowed, but only after the money has been there 60 days, with a photo ID and a selfie, and only to the original bank account. After the one-year Reg CF restriction ends you may transfer shares privately in principle, but Netcapital currently offers no facility to do it.

Its parent company's own filings say this is a live question. Netcapital Inc. (Nasdaq: NCPL) disclosed substantial doubt about going concern in its FY2025 10-K and has continued that disclosure in subsequent 10-Qs; the Q3 FY2026 10-Q (January 31, 2026) shows negative working capital of $2.9 million, a $7.6 million nine-month operating loss and $7.7 million of operating cash used. Reported revenue fell from $8.5 million in FY2023 to $869,460 in FY2025, and the SEC's August 2026 complaint alleges (in contested claims) that roughly $14 million of the FY2022-FY2024 revenue was improperly recognized in the first place. Cash fell from $4.56 million (July 2025) to $715K (January 2026); 2026 financing has come from original-issue-discount notes (e.g., $182K principal for $150K net) and a $15 million equity facility priced at 92% of recent lows; Nasdaq issued a fresh minimum-bid deficiency notice in February 2026, eighteen months after a 1-for-70 reverse split, and, after the initial deadline passed, granted an extended compliance period through February 1, 2027; and the FY2026 annual report was not timely filed (the company filed an NT 10-K on July 29, 2026). Your economic interest is in securities of the underlying issuers rather than Netcapital Inc., a failure of the platform parent would not by itself cancel those securities, but the wallet, dashboard, custodial arrangements and investor communications all depend on this corporate family, and no continuity plan is published, so practical continuity is a real question. Keep independent records, and avoid parking cash in the platform wallet: a withdrawal needs a photo ID, a selfie and a 60-day holding period.

Yes, at the parent-company level, and it is unresolved. On March 4, 2026, Netcapital Inc. and five current or former officers, directors and employees received Wells Notices, in which SEC staff stated a preliminary determination to recommend enforcement claims including Securities Act Section 17(a), Exchange Act Section 10(b) and Rule 10b-5, and reporting and books-and-records provisions; the company's 10-Q also disclosed that SEC and FINRA investigations, conducted through subpoenas and testimony requests, remained ongoing. On August 10, 2026, the SEC filed a civil complaint in Boston federal court against the company and individual defendants including its CFO, alleging that nearly $14 million of revenue recognized between October 2021 and January 2024 came from sham consulting agreements, some allegedly forged, that produced no real revenue, overstating reported revenue by roughly 345%. Two things to hold together: these are contested litigation allegations, not adjudicated findings, and the company is entitled to defend itself; and the allegations go directly to the reliability of the historical financial statements summarized in this review. Since the complaint: Cecilia Lenk, a director, settled for a $50,000 civil penalty without admitting the allegations and resigned on August 19, 2026; the case continues against the company and the other defendants. The auditor resigned on August 12, and the company says its audited statements for fiscal 2022 to 2025 should no longer be relied upon. A shareholder class action (Chance v. Netcapital Inc., D. Mass.) was filed on October 8, 2026 for buyers of the parent's stock. Separately, AltStreet found no FINRA disciplinary action against the Reg CF funding portal subsidiary, and BrokerCheck shows no disclosures for the affiliated broker-dealer, Netcapital Securities Inc. (CRD 329071). This review will be updated as the case develops.

Far less than the goal on the page. Across the 274 offerings in AltStreet's census with a reported-raise observation, the median raise is $48,580, about 10.3% of the median displayed maximum of $1 million. Only 17 of 274 reached their maximum, and only 10 raised $1 million or more. The confusion comes from Reg CF's two-number structure: the displayed goal is the offering maximum, while the SEC target an offering must legally clear has a median of just $10,000, which is why 268 of 274 observed offerings 'succeeded.' The parent's own 10-K adds that even against those minimal targets, 21 of the 70 offerings that ended in fiscal 2025 failed to raise the minimum. Always check what the company has actually raised before assuming its plan is funded.

The earliest stage in retail investing. Reading the Form C financial statements across all 473 offerings in AltStreet's census: 66% of offerings came from companies reporting zero revenue, 65% from companies reporting a net loss, the median team is 3 employees, and among companies with any revenue the median was $61,262. Sectors run from graphene (Avadain) and superconductors to whiskey brands, films, medical devices and consumer apps. Real breakouts exist, EnergyX raised $4.04 million across two campaigns in reported Reg CF proceeds here before a $50 million GM Ventures-led Series B; Vantem raised $470K before taking Breakthrough Energy money, but they are the tail of a distribution whose center is a pre-revenue company raising $46K. Netcapital's own homepage disclaimer says as much: the case studies 'may not reflect the typical or expected experience.'

For most positions there is nothing to tax for years. Common stock in a C-corporation generates no annual tax document, you recognize a capital gain or loss when you sell, or a capital loss in the year a position becomes wholly worthless (which you must document yourself, since the platform publishes no failure ledger). Held over a year, gains are long-term; for qualifying stock acquired after July 4, 2025, Section 1202 (QSBS) can provide a partial gain exclusion after three or four years and a 100% exclusion after five, subject to the statutory requirements, though whether the custodial ownership structure preserves eligibility is a question for a tax adviser before you invest. LLC membership units are different: they typically produce a Schedule K-1 every year, which can arrive late from thinly staffed issuers and can allocate taxable income you never received in cash. Check the entity type before investing. Netcapital's help center says investors usually receive no tax forms from it: it sends a 1099-B only to investors who sold securities on the platform, and K-1s are sent by issuers at their discretion. Nothing here is tax advice.

All three sell Reg CF startup equity to anyone at ~$100 minimums; they differ on scale, fees, liquidity and platform condition. Scale: Wefunder and StartEngine are the market's two largest portals; Netcapital carried $10.6 million of investments in fiscal 2025, roughly 3% of the Reg CF market, with a 15-campaign live shelf and systematically earlier-stage issuers. Fees: Netcapital charges investors nothing (its issuers pay 4.9% plus $5,000 plus 1% in equity); Wefunder charges investors ~2%, StartEngine 3.5% on many offerings. Liquidity: StartEngine operates its own thin secondary ATS; Wefunder and Netcapital have none, and Netcapital's Templum integration is paused. Platform condition: Netcapital's parent discloses going-concern doubt and faces an unresolved SEC civil fraud action filed August 2026 (contested allegations), the private Wefunder and StartEngine have no equivalent, though both carry FINRA disciplinary history (Wefunder's $1.4M 2022 AWC) while AltStreet found none for Netcapital's portal subsidiary. Choose Netcapital only deliberately, for a specific deal, funded by ACH.

Your economic interest is in securities of the underlying issuer rather than Netcapital Inc., so a platform shutdown would not by itself cancel your position: your beneficial interest is recorded by a transfer agent independent of the issuer (Equity Stock Transfer or a successor under the current agreement; older offerings may sit with Worldwide Stock Transfer per archived agreements), and escrowed funds for open offerings sit at a bank with contractual return provisions. Practical continuity is the real question. The custodial record-ownership arrangement is anchored by agreements among Netcapital entities; the wallet holding any refund balances is platform infrastructure; the dashboard is your window into positions; and issuer annual reports flow through platform channels. No backup-servicing or continuity plan is published, and the custodian's insurance is expressly for its own benefit. The practical defenses are simple: keep your own records of every position (issuer, share count, price, date, confirmations), know that wallet cash can only be withdrawn after 60 days with ID and a selfie, and remember that in a wind-down you would be dealing with the transfer agent and issuers directly.

Well-suited: investors backing a specific company they know, often through its founder community, with money they can lose entirely; and experienced angel-style investors deliberately running a many-small-positions, power-law strategy who will read every Form C. Should avoid: anyone needing liquidity (there is none, and the marketed secondary feature is paused); anyone who reads the funding goal as the funding (the median raise is a tenth of it); income investors (nothing here pays anything); investors requiring record ownership and a direct vote (a custodian holds securities as record owner and votes those carrying voting rights); and anyone for whom platform financial strength is a screen, the parent's going-concern disclosure is explicit and audited, and it now faces an unresolved SEC fraud action (contested allegations). In every case: pay by ACH, size for total loss, keep independent records, and treat the platform's marketing as promotion from an intermediary that holds equity in its own listings.