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November 16, 2016

Indiegogo lets you invest in potential startups

by John_A

When a kid with a good idea asks you for $20 to fund their new startup, you give that money in the hope they’ll do some good. That can sting, however, when they become a multi-billionaire and you don’t even get a note of thanks with $20 stapled to it. Indiegogo is working to remedy the issue by incorporating equity crowdfunding into its platform. That way, instead of getting a lousy t-shirt as a reward for your patronage, you could actually get a share in the future success of businesses that you back.

Indiegogo has teamed up with MicroVentures to actually run its new platform, which will let anyone over 18 invest in a business. Indiegogo will do the enabling, but much of the nuts and bolts will be handled by MicroVentures, and Indiegogo says it’s not liable for any mishaps. The minimum for an individual investment of $100, while the limit will depend on each business. You’ll be required to paw through certain SEC forms, too, so that you know that you could get nothing back for your cash.

It’s not likely to become a core component of Indiegogo’s business, so you won’t be able to invest in every project available. At this early stage, there’s only a handful of startups that’ll give you shares for your money, including a cocktail bar in Washington DC and a social marketplace for music. That’s likely to expand in the future as more companies look to secure investment without having to offer you crappy rewards in exchange.

Source: Indiegogo

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