Mainvest connected individual investors with local brick-and-mortar businesses before permanently closing on June 14, 2024. Examining how the platform structured its deals illustrates how revenue-sharing agreements function and how investors manage unlisted private assets when a portal shuts down.

Mainvest Shutdown and Platform Background

Mainvest, Inc. was founded in 2018 in Salem, Massachusetts, by Benjamin Blieden, Nicholas Mathews, and Felix Le Dem. The company raised $3 million in venture capital from investors including Moving Capital and Rucker Park Capital. It operated as a funding portal registered with both the SEC and FINRA.

Registration with federal regulators did not provide SIPC protection for funds placed in Mainvest offerings. When the company ceased operations on June 14, 2024, active investors had to track and manage their unlisted private assets without portal support. Because unlisted private securities do not trade on public exchanges, platform closures leave note holders responsible for monitoring their financial claims directly.

Revenue-Sharing Notes Versus Equity Investment Securities

During its operation, Mainvest offered two primary deal structures for funding local businesses such as bakeries, breweries, coffee shops, housing co-ops, and licensed cannabis firms:

  • Revenue-sharing notes: These debt instruments required businesses to repay the principal plus a fixed return, known as an investment multiple. Mainvest scheduled repayments quarterly as a percentage of gross revenue until reaching maturity. Because these payouts count as interest income, the IRS taxes them at ordinary income rates rather than long-term capital gains rates.
  • Equity investment securities: These instruments provided direct ownership stakes. Payouts rose or fell with company earnings, offering higher potential returns alongside greater exposure to revenue drops. Holding these equity positions longer than one year allowed investors to qualify for long-term capital gains tax rates.

Under a revenue-sharing note, an investor received quarterly payments calculated from gross revenue until reaching the target multiple, regardless of changes in the overall valuation of the business.

Mainvest assets were illiquid. The platform operated no secondary market for selling debt or equity holdings before maturity, and transfer restrictions routinely locked up capital for 12 months or longer. Investors could cancel pending commitments up to 48 hours before an offering closed, after which all funds became non-refundable.

Screening Standards and Social Verification Requirements

Businesses applying to list on Mainvest underwent background checks intended to filter out potential fraud. Mainvest also enforced a social vetting requirement: founders had to raise at least $10,000 from 10 personal acquaintances before launching a public campaign. Mainvest attributed its reported repayment rate of over 96% to this requirement.

Prospective investors evaluated offerings through a public data room on each campaign page, which contained:

  • Expense, gross profit, and revenue projections covering 3 or 5 years
  • Business plans detailing how the company would spend the capital
  • SEC filings and written risk disclosures
  • A public discussion tab for messaging business owners directly

Account Eligibility and Funding Capital Requirements

Mainvest allowed non-accredited retail investors to participate in small business offerings. Opening an account required:

  • Being at least 18 years old
  • Maintaining a U.S.-based bank account
  • Meeting a minimum investment threshold of $100 per campaign, though individual listings could establish higher minimums

Accounts were free to create. Funding required a linked U.S. bank account, as Mainvest did not process credit or debit card payments. Identity verification required a Social Security number for investments over $5,000 and a government-issued photo ID for amounts exceeding $15,000.

Investment Alternatives Across Real Estate, Automated Portfolios, and Equities

Following Mainvest's closure, investors seeking private market assets or automated strategies have several other models to evaluate:

  • Fundrise: Focuses on private real estate investments, with account minimums starting at $10 for property-backed projects.
  • Automated Robo-Advisors: Services such as Betterment build and rebalance ETF portfolios tailored to specific risk tolerances and timelines.
  • Traditional Brokerages: Self-directed accounts offer access to public stocks with $0 account minimums and fractional share trading starting at $1.

Mainvest offered retail investors direct entry into local business debt, but its closure highlights the liquidity constraints and operational risks tied to unlisted private securities. Evaluating platforms like Fundrise or automated ETF portfolios allows investors to compare alternative asset structures and liquidity terms across different markets.