Indiegogo Launches Equity Crowdfunding
By: Slava Rubin, Co-Founder of Indiegogo
We started Indiegogo for a very simple reason: we wanted to eliminate the gatekeepers to finance. During our whole lives, my co-founders and I saw worthy ideas fail for the simple reason that they lacked the connections to access funding, and we wanted to change that. When we first came up with the concept of “crowdfunding” almost 10 years ago, we hoped to create a platform that allowed anyone to invest in and help build the companies they believed in. After trying to secure funding for this idea, and getting rejected 93 times by venture capitalists, we realized that a platform like this was needed more than ever. Because of the Securities Act of 1933, unaccredited investors (the general public) couldn’t invest directly in a company. Instead, we came up with the perks-based model, where individuals offer backers incentives in exchange for their support. Through this perks-based model, backers have funded over $1B to date in support of entrepreneurial and creative ideas.
Among these incredibly inspiring companies is Misfit Wearables, which not only surpassed its goal and raised $846,675 on Indiegogo, but went on to raise $64M in VC funding. It was ultimately acquired by Fossil for $260M after proving the demand for its beautiful wearable fitness tracker. MUSE, the brain-sensing, brain-training headband went on to raise $17.2M in VC funds after an $287,677 campaign, and is now found in retail stores.
From the support of our backers to the success of our campaigners, we see potential everywhere on our platform. We want to continue to support our campaigners’ success beyond crowdfunding, as their businesses continue to grow and scale. Because of our work to accomplish this mission, we were invited to the White House for the signing of the JOBS Act in 2012, and in the last four years since we’ve worked hard to help the SEC develop guidelines to expand investment opportunities to unaccredited investors. Today, we are excited to finally announce something we’ve been working hard on since 2006: our equity crowdfunding platform.
Starting now, entrepreneurs and investors will be able to build businesses together in an unprecedented way by allowing anyone to invest, regardless of their income, net worth, or their connections to the overwhelming and confusing world of traditional investing. Starting today, people like Pia and Rachel from Republic Restoratives can make their dreams of building an all women-owned, small-batch whiskey distillery into reality without having to ask VCs, banks, or any other gatekeepers for permission. Instead, family, friends, and even strangers who share their vision can help this new business thrive and potentially benefit financially, if the company goes on to greater heights.
To help make this happen, we’ve partnered with MicroVentures, leaders in the equity crowdfunding space, to give entrepreneurs a new way of bringing their ideas to life. They’ve helped companies raise over $100M through 200+ deals since 2010, and 95% of the equity crowdfunding campaigns on their site have been funded. Together, we are giving Indiegogo backers the chance to be investors, and get more than a perk and the satisfaction of contributing to an amazing idea. Of course, their are risks and investors could potentially lose the money they invested if the company fails, but now, for the first time ever, they can potentially profit from their support. From a tech startup, to a neighborhood coffee shop, to the next hit documentary, we’re making it possible for anyone to join the crazy journey that is entrepreneurship.
You can read more about our plans via this New York Times article from today’s business section of the paper.
As capital markets in the United States change, we are thrilled to be at the forefront of creating both funding and investment opportunities for anyone who is passionate about an idea. If the perks-based model has done everything from helping entrepreneurs raise $13M for a revolutionary way to harvest honey, to making the first crowdfunded baby possible, I can’t wait to see what equity crowdfunding has in store. Now you, and I really mean any of you, can be part of the team that builds something big.
Important Disclosure: Indiegogo.com is a website owned and operated by Indiegogo, Inc., which is not a broker-dealer, funding portal or investment advisor; and neither the website nor Indiegogo, Inc. participate in the offer or sale of securities. All securities related activity is conducted through First Democracy VC, a registered funding portal and member of FINRA or MicroVenture Marketplace, Inc., a registered broker-dealer and member FINRA/SIPC. No communication, through this website, email or in any other medium, should be construed as a recommendation for any securities offering.
This article was originally published on Linkedin.com.