This could be a game-changer for equity crowdfunding.
Equity crowdfunding sites have long targeted successful raises from sites like IndieGoGo and Kickstarter to raise on their platforms. This makes sense because these companies already raised millions of dollars just to buy their products. This means they have a good following, know how to raise money online, have orders and demand for their product, and can likely attract investors because of all of that. So, it makes sense to find companies that have lots of people wanting a product, then wondering if those same people want to invest.
It seems that StartEngine and IndieGoGo have officially inked a deal that makes this process a bit more official. While it’s not exactly clear what this entails, the announcement notes this is an “exclusive” deal, meaning it’s likely they will be solely working together on this. This likely doesn’t mean IndieGoGo companies have to go on StartEngine if they choose to raise funds, but rather IndieGoGo will be working to create a funnel from IndieGoGo to StartEngine, should they choose to do so.
Deals like this aren’t necessarily unheard of, either. One famous deal between Wefunder and Y-Combinator has created massive amounts of deal flow and likely hundreds of millions of dollars in investment volume on the Wefunder platform. Many portals partner with venture capital firms, accelerators, and similar deal flow networks to get more cash to startups they have investments in, which also helps the portals themselves by getting revenue.
Ultimately, this is definitely a big step for StartEngine because IndieGoGo has a network of millions of people buying products and already raised as much as $3 billion for just products. Cross-pollinating those same crowds will help everyone involved, and looks to be a promising step forward for the Equity Crowdfunding industry.