StartEngine, one of the largest investment crowdfunding platforms in the US, has announced a partnership with rewards platform Indiegogo.
According to a release, the “exclusive” deal will facilitate the “full life cycle of capital from the crowd.”
Becky Center, the CEO of Indiegogo, stated that partnering with StartEngine will “prove immensely beneficial for companies crowdfunding on the Indiegogo platform.”
“A startup can begin raising capital with us to fortify a concept, acquire customers, and scale, and when the time comes, we can pass the baton to StartEngine to help them attract shareholders and raise the rest of the way.”
Howard Marks, co-founder and CEO of StartEngine, said:
“At a pivotal moment for founders when many VC firms have slowed their pace of investments, we’ve joined forces with a fellow leader in crowdfunding to ensure startups consistently raise the capital they need. What we have created is a funding ecosystem from an idea stage through Series C.”
Marks added that you should “always be raising” as you never know what is around the corner.
“The truth is some businesses may never have to take venture capital,” said Marks.
The partnership process is outlined as follows:
- Launch a rewards-based crowdfunding campaign on the Indiegogo platform to introduce or solidify a new concept and acquire customers.
- Raise funds for proof of concept and minimum viable product or prototype and build an enthusiastic community of backers.
- Migrate the community as the company transitions to StartEngine to launch a regulation crowdfunding campaign.
- Raise capital to scale the business while simultaneously acquiring new shareholders who serve as champions of the brand, motivated to see it succeed.
Of note is the fact that Indiegog0 was created with the intent to migrate into investment crowdfunding. Prior to Center’s leadership, Indiegogo had a partnership with MicroVentures that was eventually ended. MicroVentures still facilitates a full stack of securities crowdfunding, including Reg CF.
Indiegogo is one of two large rewards platforms in the US that effectively provide a pre-sale environment where individuals and firms can sell a product prior to it being produced. Typically, purchasers pay a discount for the product while committing their money in advance. The process can reveal if there is a demand for the product (or service) and, if so, perhaps raise early-stage capital via a sale of securities.