Crowdfunding sites like Kickstarter (KICKSTARTER) and Indiegogo raised start-up cash for a generation of online entrepreneurs, but one increasingly visible method of internet-sourced financing seemed to have slipped their notice—until now.
This week, Indiegogo is making its first foray initial coin offerings, also known as ICOs, according to the New York Times. It told the paper it will scrutinize ICOs by its clients and then help in the sale of digital coin.
ICOs raise funds for software projects by selling custom-made digital currencies to online investors. In some cases, they have been wildly successful: ICO-generated financing to date amounts to $3.5 billion, most of that raised this year, according to Coin Desk. For perspective, that’s more than Kickstarter has raised over its entire eight-year history.
On several occasions, ICO’s have blown traditional crowdfunding out of the water. Earlier this month the Financial Timesreported that an online art gallery had raised $15 million via an ICO; a prior attempt to raise startup cash through crowdfunding had missed its 400,000 GBP target.
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Despite their financial allure, ICOs, which are unregulated, have long been considered high-risk and unstable. Indiegogo says it wants to change this.
Slava Rubin, one of the platform’s founders told the Times, “We want to bring a brand of trust to the entire industry, which we think will bring ICOs to the mainstream.”
Indiegogo’s first ICO, which will start this week, aims to raise $5 million for a Fan Controlled Football League that allows people who buy its coins to draft players, hire and fire coaches, and call plays in real time.