Crowdfunding platform Indiegogo has opened up a new section of its site for equity crowdfunding projects, aka projects in which backers accept a stake in the company in return for their investment.
Crowdfunding platform Indiegogo has partnered with investment firm Microventures to open up a new section of its site for equity crowdfunding projects, aka projects in which backers accept a stake in the company in return for their investment.
If this sounds familiar, it's because game crowdfunding platform Fig was founded last year to do exactly this -- allow accredited and non-accredited investors (aka most people) to invest funds in a project and potentially earn proceeds on its sales.
The fact that Indiegogo (which is open to creators of everything from music to macrame, instead of just games) is now following in Fig's footsteps foreshadows a broader crowdfunding market shift to embrace equity crowdfunding.
Developers looking to use Indiegogo's new equity crowdfunding platform should know that it's typically much more expensive than creating a normal crowdfunding project (which is free, with a 5 percent cut going to Indiegogo), since allowing equity investment requires a bunch of upfront fees. Indiegogo representatives told the New York Times it's an estimated $7,000 upfront cost.
Indiegogo itself will then reportedly take a 7 percent cut of any funds raised, as well as 2 percent stock in the project. From investors, the platform will collect either 2 percent of their investment or $7 -- whichever is higher.
Right now Indiegogo is allowing anyone 18 or over to invest in these projects, with a minimum starting investment of $100 and a variable maximum based on other financial criteria, presumably including whether or not you're an accredited investor (which requires you to earn over $200k a year or have a net worth of at least $1 million.)
Among the launch projects on Indiegogo's new equity crowdfunding platform is one game, ArtCraft's MMORPG Crowfall. The game already raised roughly $1.7 million in a successful Kickstarter campaign, which developers Gordon Walton and J. Todd Coleman told Gamasutra last year was run in part to gauge whether there was enough interest for a "niche" MMORPG.
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