Indiegogo hopes to become a major player in getting equity finance funds, if and when there is clear finalization of regulations. Slava Rubin, who is CEO of Indiegogo,is of the opinion that there will be a huge market for equity crowd funding if the regulations get a nod. According to him, the crowd funding market is extremely bullish.
Rules to change for investment in young companies
In the present scenario, only recognized or qualified investors are permitted to make an investment in a start-up or newly established company. However, certain rules are being worked upon by the Securities and Exchange Commission, which would broaden the scope allowing anybody to invest money in young firms simply via an online procedure.
This change in rules would provide young start-ups another source to receive capital from the investors who are non-accredited. This essentially means individuals who earn less than 200,000 dollars.
While there is positivity around this change of rules as it could potentially benefit young businessmen in a very big way, there is also a lot of risk involved with respect to inexperienced investors, which could lead to fraud. Also, there is huge risk of loss for investors who are not familiar with the rate at which start-up ventures could crash.
According to Rubin, there will have to be a balance between ensuring investor fund security and also making sure that there is scope for innovation within the range of risk. In this entire act of balancing the risks for all parties involved, the company would still have to keep looking ahead and growing.
Rubin further added that Indiegogo has been responsible for funding more than 200,000 campaigns and has tasted success as the capital demand for projects is good and the demand for investing companies would also be getting strong.
In fact, the fact is that the requirement for equity crowd funding for both, young companies as well as projects is gaining so much momentum that it will probably define the next 10 years. Rubon says that it is a very interesting industry. The 80’s were dictated by desktop computers, the online e-commerce industry ruled the 90’s and the 2000’s saw a boom in social media networks. He believes that the present decade will possibly be remembered as the ‘decade of crowd funding’.