Crowdfunding platforms like Kickstarter and Indiegogo allow the public to help pool money together to help get products off the ground. We’ve seen many successes come from these initiatives, like the Pebble smartwatch for instance. However what if you were so enamored by companies like Pebble that you would prefer to invest in them rather than their products?
The folks at Indiegogo have come up with something similar called Equity Crowdfunding, which is basically allowing the public to invest in startups. This initiative was created in partnership with MicroVentures where investing in a company will no longer give you products, but rather a share in the company itself, so in a way it’s almost like buying stocks.
As Indiegogo points out, this is possible thanks to the SEC’s 2012 JOBS Act that allows anyone to invest in companies online, whereas previously only accredited investors were allowed to. Of course there is no guarantee that the company you invest in will succeed or yield any returns, but it’s just like crowdfunding a product, there are risks involved so you should definitely do your homework before diving right in.
The amount of shares you get for your money will also vary from company to company, just like the stock market. The good news is that you won’t need a lot of capital to begin because as long as you’re 18 and older and have $100 to your name, you’ll be good to go. More details on the companies currently seeking investors can be found on Indiegogo’s website.
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