If you’ve ever seen an awesome project on Indiegogo – like one of these – and wished you could actually invest in it instead of merely throwing down a few bucks for a “perk,” well, now you can.
The San Francisco-based company on Tuesday announced a new equity crowdfunding service that, similar to game-crowdfunding service Fig, lets you buy a stake in a startup that you believe is going places. A minimum of $100 is required for the current batch of listed companies.
Indiegogo’s fledgling platform takes advantage of a new securities rule enacted back in May that opens up investment opportunities to anyone with the cash to splash. Up to now, only accredited investors – those with a yearly income in excess of $200,000 or a net worth of at least $1 million – have been able to put money into ventures of this nature.
But as the NY Times notes, the old system meant that massively successful crowdfunded projects like the Pebble smartwatch and the Oculus Rift VR headset were open only to investment from venture capitalists and wealthy angel investors. This left regular backers, some of whom may have been interested in supporting the project’s creators beyond an early-bird purchase, with no opportunity to get more deeply involved and reap the potential rewards. But now anyone can buy a stake in a startup they like the look of.
“Unlike rewards-based crowdfunding, with equity crowdfunding individuals receive company shares, not just perks, in exchange for their equity investment,” Indiegogo’s Slava Rubin wrote in a post announcing the new system. “Not only can businesses gain the crucial help they need from a broader pool of funders – but investors can support a business they believe in, and can even benefit financially if a company goes on to greater heights.”
Rubin said that Indiegogo works directly with entrepreneurs across industries, “so you can partner with the innovative startups that interest you most.”
“Investing in startups means you may own a piece of the company and are along for the ride, with all the ups and downs. You may not have a seat at the boardroom table, but you can help a great idea come to life.”
Of course, putting money into any company touting a new product carries with it an huge amount of risk – yes, you might lose all your money – so wannabe investors will need to tread carefully and do their homework when selecting a startup they think shows potential. Still, it’s great that Indiegogo is offering the opportunity, and for those with the funds to spare, a wise investment could feasibly lead to greater riches, as well as the satisfaction that comes from backing a winner.
To find out more about the platform and which startups are currently looking for investors, check out Indiegogo’s dedicated site here.