Entrepreneurs seeking funding for their startups now have another place to go: Indiegogo.
“Wait,” you may say, “can't I already use the crowdfunding platform to raise money for my dream product?” That's right, but Indiegogo recently launched an equity crowdfunding service, which utilizes new government rules that took effect in May and allow anyone to invest in startups. Previously, only accredited investors who met certain financial requirements were eligible to back businesses in this manner.
“Our mission has always been to make it easier for individuals to raise money for projects they are passionate about, and this is the latest way we’re helping entrepreneurs access the financing they need while also giving backers the chance to invest in new companies,” Indiegogo CEO David Mandelbrot said in a statement. “Since Indiegogo first launched, we’ve wanted to offer these sort of investments, and we’re very excited to be officially giving the millions of people who visit our platform every month the chance to get involved with equity crowdfunding opportunities.”
As of today, about US$ 11.7 million had been raised for businesses using equity crowdfunding, according to NextGen Crowdfunding. This count includes three projects that have raised US$ 1 million, the maximum amount allowed by law.
For its new portal, Indiegogo teamed up with MicroVentures, which helps companies raise funds using equity crowdfunding. Equity crowdfunding campaigns will be listed on both sites, with transactions made through MicroVentures. Legal documents will also be automated through an online questionnaire for funding-seeking companies through iDisclose.
"It's great to see an industry leader in the rewards crowdfunding space jump into the equity arena," says Kendall Almerico, CEO of BankRoll Ventures and an attorney who works with crowdfunding campaigns. "The long-term success of the JOBS Act laws and regulations will be accelerated when people already familiar with pre-purchasing goods on rewards-based sites like Indiegogo move to actually investing in small companies and emerging businesses through equity crowdfunding."
During a previous interview with Entrepreneur, Mandelbrot said he wants Indiegogo to be a "springboard" for business owners.
More than US$1 billion has been raised from more than 8 million people on Indiegogo, according to a press release. The company says it is "well-positioned" to introduce entrepreneurs and investors to equity crowdfunding. The service is launching with four offerings:
- ArtCraft Entertainment: A game company looking to fund Crowfall, a massively multiplayer game.
- Play Impossible: A new gaming company "using powerful, miniature sensors to transform athletic balls into game controllers connected to a smartphone."
- BeatStars: A music marketplace and distribution company "where more than 350,000 music producers and recording artists collaborate, sell, distribute and share their music worldwide."
- Republic Restoratives: A women-owned craft distillery and cocktail bar in the heart of Washington, DC, that seeks to expand its product lines and distribution market.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by Entrepreneur.com.ph.