Crowdfunding platform Indiegogo has a plan to help initial coin offerings (ICOs) break into the mainstream, even as the U.S. Securities and Exchange Commission (SEC) is ramping up its oversight of the nascent ICO markets.
Announced on Tuesday, Indiegogo’s new ICO investment platform will introduce this nascent fundraising model to a wide swath of potential investors who — despite the year’s ICO hype — have never participated in a token sale.
“ICOs are a profoundly important and exciting new means of Crowdfunding,” said Slava Rubin, Indiegogo founder and chief business officer. “But what has been missing to date is a platform that can make ICOs accessible to a global audience, while maintaining the strictest standards for legal compliance and quality control. This is a big step towards achieving our mission of democratizing finance around the world.”
Significantly, the platform will support both utility and security tokens, and it will help startups comply with SEC regulations governing securities offerings. Operating under a provision in the 2012 JOBS Act, non-accredited investors will be able to invest up to $10,000 in each ICO — even those registered as securities — although each company will be restricted to $1 million in contributions from this class of investors.
Investors will be able to contribute using both fiat and cryptocurrencies, eliminating a barrier to entry that prevented many non-cryptocurrency holders from entering the ICO markets.
Additionally, Indiegogo and its partners will vet projects before they list them on the platform, helping protect investors from the scams that currently pervade the industry. Just this week, the SEC filed a fraud suit against the organizers of the PlexCoin ICO, and one of those organizers was thrown in jail for violating a court order prohibiting him from operating the token sale.
The first project to utilize the platform is the Fan-Controlled Football League (FCFL), a start-up that plans to create a football league in which the fans take an active role in managing the teams. This participation will range from making play calls to front-office decisions, and fans will earn voting rights by purchasing FAN tokens. The FCFL ICO organizers are Indiegogo alums who utilized the platform to crowdfund the purchase of a minor league football team to test the fan-led team management model.
But while the Indiegogo ICO platform will likely help token sales further permeate the mainstream, the service also represents a significant growth opportunity for the company. Over the course of its ten-year history, Indiegogo has helped startups raise more than $1 billion — a significant sum — but according to one estimate, ICOs have raised more than $3.6 billion in 2017 alone.