Indiegogo Goes Where Few Companies Dare: Into Initial Coin Offerings
Small investors will be allowed to invest about $10,000 in most projects,
and companies will be able to raise no more than $1 million from these investors, because of restrictions put in place by the 2012 JOBS Act.
The head of the Securities and Exchange Commission, Jay Clayton, has said several times — most recently on Monday —
that many coins should be categorized as securities and be registered with the authorities, which almost no projects have done.
Sohrob Farudi, the chief executive of the Fan-Controlled Football League, said he was willing to
accept the restrictions involved in working with Indiegogo to stay on the right side of the law.
The first project to use the service, a start-up known as the Fan-Controlled Football League, will begin raising $5 million on Indiegogo this week.
Early next year, it expects to do a full initial coin offering, and will likely look to raise around $30 million, Mr. Farudi said.
The start-up aims to use the money to create a league of football teams
that will be guided by people who buy the league’s coins (a crazy-sounding idea that has already been tested).
An online art gallery known as Maecenas, which failed to raise 400,000 pounds (currently about
$533,000) through crowdfunding this year, raised $15 million a few months later through an I.
Indiegogo started a new service on Tuesday to vet coin offerings, also known as I. C.O.s, and then help sell them to small and large investors.