Sunday, August 7, 2016

What Happens When a Crowdfunding Site Goes Mainstream?

Exciting things are happening at the crowdfunding platform Indiegogo. In the next few months the company plans to launch its equity crowdfunding service. Although the exact plans are still a mystery, this is huge news in the crowdfunding world and could have a massive upshot for Indiegogo. 

The Evolution of Equity Crowdfunding 

Indiegogo logoUntil very recently equity crowdfunding has not been accessible to the general public. In May this year everything changed when legislation was implemented that allows minor investors to buy a smaller stake in startups. Bear in mind that small means up to US$1 million. Before this rule came to play, only investors who had at least a million in assets or a huge annual income could join in the crowdfunding fun. In part because of this rule, crowdfunding sites like Indiegogo have only allowed companies to raise funds from punters in exchange of incentives like discounts or early supply of products or services. The new law allows companies to sell equity, as long as it is done through a registered portal, a broker or a partnership with a broker. 

Why this is Good News for Small Businesses – and for Indiegogo

This new law is a big deal for entrepreneurs who need just that bit extra to jumpstart their product or service offering to take it to the next level. The impact it is likely to have on Indiegogo is immense. The crowdfunding platform has been rocking and rolling for the past eight years and rolling out impressive numbers:
• Close to 700,000 campaigns have been listed
• More than seven million backers have funded campaigns
• Nearly US$1 billion has been raised
• Around 15 million campaign curious people visit the Indiegogo site every month
• According to Indiegogo, almost half of the campaigns have been for small businesses

Looking at the numbers, Indiegogo clearly has a powerful global presence, and just like its supporters, the popular crowdfunding platform may well be ready launch itself to the next level. By making money-raising campaigns available through investment rather than perk-based financing it becomes easier for Indiegogo entrepreneurs to market opportunities to potential backers - and to the millions of site visitors every month. This could be exactly what some of these visitors are looking for when they drop in. 

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