Even though initial coin offerings are still frowned upon in most parts of the world, interesting things are taking place in this industry. The last thing most people expected was to see Indiegogo get on board with this business model. At the same time, the company showed a keen interest in crowdfunding before it became “cool”. The company hopes to do the same with ICOs moving forward.
IndieGogo Embraces Initial Coin Offerings
It is important to note right off the bat that Indiegogo itself will host initial coin offerings on its main platform. Moreover, the crowdfunding giant has launched a new service to vet such coin offerings and help them sell tokens to large and small investors alike. The latter aspect is rather interesting, considering the SEC is still on the fence as to how it aims to regulate initial coin offerings moving forward.
Several projects have already begun using the company’s new platform. Any company looking to raise money using this innovative business model will have to adhere to strict securities laws in the United States. So far, there are no companies with ICO ambitions which have officially registered with the SEC in this capacity. It is possible Indiegogo may be of help in this regard as well, since it’s in a good position when it comes to these unconventional ways of raising money.
A project known as the Fan-Controlled Football League hopes to raise US$5 million through its ICO in the future. Its team has enlisted Indiegogo to vet the project and encourage token sales. Funds will be used to create an American football league whose teams are guided by the token holders. It is a very different spin on football as we know it, yet the concept seems to have some merit in the eyes of investors already. Having the backing of Indiegogo will certainly make it appeal more to the masses than it would otherwise.
We’ve also seen some of the smaller crowdfunding platforms look at ways to get involved in the initial coin offering business. Two names come to mind almost immediately in this regard, as AngelList and Republic have started to make an impact. Although there haven’t been any major changes in this space just yet, there is a lot of overlap between crowdfunding and initial coin offerings, by the look of things. Bringing trust to this contested industry will not be easy, mind you.
It is certainly true there is a bright future ahead for initial coin offerings, assuming they play by the rules. Hundreds of projects raised over US$3.5 billion during 2017 alone, and that number could have been much higher without the bans in China and South Korea. At the same time, a proper set of rules will help this industry thrive like never before. Indiegogo is going down an interesting path in this regard, although it shouldn’t face too many legal repercussions for it, for now.
As one would expect, there will be some restrictions in place. Indiegogo will register these ICOs as securities in most cases. Small investors can’t contribute more than US$10,000 per project, which is still a substantial sum. Moreover, companies will not be able to raise more than US$1 million from small investors. These are guidelines everyone will have to live with, as the government still wants to protect investors first and foremost. It remains to be seen if the new platform will be attractive enough to interest those investors, though.