Initial Coin Offerings, aka ICOs, are in their “wild west phase,” and it’s up to buyers to determine whether the firm offering coins is legit or not. There is still a lack of a reliable third party that would vouch for, at least, some elements of the offering. The risk is and always will be there, but there are some things that could be regulated, if not by some government than by a trusted company.
The popular crowdfunding website Indiegogo thinks it has “what it takes,” to be that reliable third party people are already trusting to buy things while they are still not ready for production.
Since last year, the site has a service called Equity Crowdfunding that allows anyone to buy into emerging businesses, which has so far helped 30 companies raise more than $7.5M from 1100+ investors globally. Extension to the ICO market seems like a logical next step.
The global platform for ICOs
This year alone, companies have sold more than $3.6 billion in cryptocurrency tokens, which is greater than all of the venture capital raised in the same period. So, while there are some skeptics out there, ICOs are emerging as a viable way for new companies to get to early customers and capital.
Designed in partnership with MicroVentures, Indiegogo’s latest offering aims to solve many of the issues individuals have when they want to invest their money in digital tokens.
They say that entrepreneurs have already asked them for help, and now they are responding with an offering that includes three elements which should make Indiegogo the ideal place for token sales:
1. Accessibility
Typically those buying into ICOs are tech-savvy folks; they find out about some “hot ICO” from a hard-to-find forum or from a friend who is well versed into cryptocurrencies.
Indiegogo is known by the mainstream media, and should be able to help companies reach just about anyone interested to invest in digital assets.
The company’s site has 10 million monthly visitors, the fact that should help companies get to more investors, as well as customers, fans, partners and developers.
2. Compliance
This is where Indiegogo’s partnership with MicroVentures, a FINRA-registered broker-dealer, kicks in; said company already helps ensure existing crowdfunding offerings are SEC compliant. Similarly, Indiegogo plans to offer ICOs in an SEC-compliant way to protect both sellers and investors.
For sellers, MicroVentures — on behalf of Indiegogo — can facilitate token pre-sales inside current SEC regulations including Reg CF, Reg D, Reg A+ and Reg S, in addition to providing critical investor accreditation validation, know-your-customer (KYC), anti-money-laundering (AML) services and more. Adding to that is the fact that in some states, like Texas and Florida, certain investments can’t even be offered without a registered broker-dealer.
3. Curation
Indiegogo won’t allow just about anyone of offer tokens through its platform. Together with MicroVentures, the company will look to source the “very best token pre-sales.”
This entails a higher trust among investors, while companies will get to know that their pre-sales will be in good company on the platform.
Also, the two companies will be reviewing all the white papers, making sure that only ICOs that actually make sense are offered through Indiegogo.
The first ICO is now live!
And it’s the Fan-Controlled Football League (FCFL), which is touted as America’s first truly democratized sports league. FCFL lets the crowd decide everything, from calling the team plays in real time, to deciding who is on the field, to choosing team names, and even designing uniforms. It’s like next-level fantasy football.
For what it matters, FCFL is also a proven Indiegogo alum. They ran a successful perks campaign on Indiegogo and were able to buy a football team in the Indoor Football League, which allowed them to test their model and build the app that lets fans call the shots.
You can learn more about the FCFL token sale from this page.
Kickstarter is not interested in ICOs
You may be wondering whether Kickstarter, Indiegogo’s archrival, will take the same (ICO) route; well, they are not interested.
“The answer is 100 percent a very firm no,” the Brooklyn-based company’s spokesperson told CoinDesk. “Not something we looked into or will look into.”
As a reasoning behind this decision, they said that Kickstarter’s mission is to “help bring creative projects to life,” and for some reason – ICOs are not answering that call.
It’s a shame, we think, since Kickstarter has so far been used to successfully distribute more than $3 billion to creative projects. They obviously have the audience, and extending to ICOs would put that audience to an even better use. But that’s just our thinking, and we’re not necessarily right. Nor wrong.