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Crowdfunder Indiegogo Launches $12M Security Token Sale

Indiegogo, a popular crowdfunding site, has recently made another foray into the crypto industry, facilitating the sale of asset-backed tokens, which are classified as securities by regulators, on its platform.

According to information relayed by The Verge, Indiegogo has commenced the sale of shares of the St.Regis Aspen Resort. The Colorado-based hotel is reportedly looking to raise upwards of $12 million for its shares, which have taken the form of “Aspen Digital tokens” in this unexpected move. Commencing on August 24th, US-based accredited investors can buy these ERC20-based security tokens via an SEC-registered broker-dealer, through the medium of U.S. dollars, Bitcoin (BTC), or Ethereum (ETH).

Essentially, the owners of the so-called “Aspen Digital tokens” will hold shares of the aforementioned resort, but through the digital medium of a public blockchain. The Next Web’s ‘Hard Fork’ Column noted that the ownership of these tokens can only be used as a price speculation tool, as there are “no physical perks” involved with these tokens.

Issuing a statement on the manner, Indeigogo founder Slava Rubin noted:

We have always strived to foster innovation and provide our users access to some of the most novel and interesting products and ideas from around the world. With the blockchain revolution fully underway, we at Indiegogo are excited about the world-changing impact and potential of security tokens.

To be slightly contradictory to this statement, Indiegogo does actually not play too big of a role in this sale, with the San Francisco-based crowdfunder startup working on the promotional and marketing side of this sale. The Templum Alternative Trading System, a reportedly SEC-registered broker-dealer, will be the firm actually facilitating the purchase and sale of the tokens, along with transferring the funds to the hotel’s bank account.

As it stands, it seems that all is going to plan pre-STO, but only time will tell if Aspen can raise $12 million as it hopes.

Indiegogo’s Affection With Blockchain And Crypto Assets 

Image Courtesy of The Verge

This isn’t the startup’s first dance with crypto assets, with Indiegogo promoting a firm’s ICO (not STO) in December of last year. This wasn’t a fruitless venture, with Rubin noting that the ICO “went well,” adding that the token sale had met its funding goals. But the success of Indiegogo-backed offerings doesn’t seem to be all luck, as the co-founder pointed out that his firm has a “diligence team” to look into the companies looking for promotion via the crowdfunding page.

Nonetheless, Indiegogo’s executive team still seems to hold an unbridled affection for crypto assets and their underlying technology. Speaking with CNBC, Rubin noted that blockchain offerings will help to “democratize access to capital” and will unlock the doors to the often exclusive investment world to “all kinds of people” around the globe.

Photo by NeONBRAND on Unsplash

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Goodbye Kickstarter? The Blockchain-based Project Aims to Challenge the Crowdfunding Sector

A new Ethereum Blockchain based platform called Acorn seeks to create an open, global community and marketplace for crowdfunding- opening it up to new participants such as those living in developing countries.

By incorporating P2P smart contract based governance, Acorn plans to supersede the current roster of crowdfunding platforms, and offer a service which will overcome geographic, political and economic borders. It also intends to mitigate any issues that may otherwise arise from cross-national jurisdiction and litigation.

According to the project’s team, use of the decentralized Blockchain for transaction verification/storage and a proprietary token currency (Acorn, ‘OAK’) means that “Acorn can bypass local taxation that would otherwise apply.”

“By funding through an ICO, and utilizing the Ethereum Blockchain, the Acorn Collective will eradicate the traditional three to five percent transaction fees and five percent platforms fees normally associated with other crowdfunding platforms, such as Kickstarter and Indiegogo,” the Acorn white paper states.

Acorn Hub thus incorporates all aspects of the platform’s crowdfunding infrastructure. However, the coin economy promises to deliver a handful of significant and related essential services. The Acorn marketplace for post funding product sales, without fees is one of them. Other services include marketing support and POS payments app allowing OAK transactions via smartphone.

When crowdfunding doesn’t fund the crowd

The crowdfunding phenomenon has had a huge impact on consumer-based industries in the past decade with its first generation of platforms pioneered by organizations such as Kickstarter and Indiegogo.

Starting as a purely community-oriented platform which reduced the barriers to entry (to concepts such as financial investment sourcing for the creation of original projects); the success of crowdfunding is such that it has even attracted the interest of multinational corporations.

Rather than directly relying on the “crowdsourced” income, these companies often use crowdfunding as a means of assessing public interest and potential sales of new products,  as well as a pitching tool towards the acquisition of traditional forms of investment, such as venture capital.

The growing popularity of this platform and the power with which the existing (centralized) market leaders hold has correlated with high fees, which are applied on top of any local taxes that may apply to you. Currently, individuals and SMEs are competing for funding with Industry veterans, which makes the extortionate fees a disproportionate barrier to entry for candidates with less funding and partnership to begin with.

These platforms have been hailed for the significant role they have played in lowering the barrier to entry for talented entrepreneurs seeking business funding to who may otherwise lack finance or partnerships.

Despite this, there are still many more barriers that exist, not only to existing users due to the basic fees and tax structure, but the millions who live in states and cities which the current market leaders cater to. The Acorn project could break down the borders in the crowdfunding sector.

ICO pre-sale

Acorn’s ICO pre-sale has been officially announced for launch on Monday Jan. 29 and will have been running through to Friday Feb. 19.  

The Public ICO will be a true test of public interest, and an example of crowdfunding the concept of crowdfunding itself; rather than other traditional forms of investment.

Daniel Mitchell

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Kickstarter ICO? Don't Count On It Says Crowdfunding Leader

The company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business.

Coming in response to the news yesterday that competitor Indiegogo would facilitate ICOs on its platform, supporting entrepreneurial efforts in this new area of fundraising, a Kickstarter spokesperson told CoinDesk that the firm isn’t looking to follow this lead.

“The answer is 100 percent a very firm no,” a company spokesperson said.

Since launching in 2009, Kickstarter has been used to successfully distribute $3.04 billion to creative projects, according to its self-reported statistics. It first crossed the billion-dollar mark in 2014. Total ICO funding so far is at $3.8 billion, according to CoinDesk’s ICO tracker.

Kickstarter offered few details as to the reasoning for the decision, ultimately directing CoinDesk to its charter, which has five planks.

The first reads, “Kickstarter’s mission is to help bring creative projects to life” and the fourth says, “Kickstarter is committed to the arts.” In 2015, the company insulated itself from pressure to make profits its sole priority by reincorporating as a public benefit corporation (PBC).

PBCs are a relatively new legal entity that protects companies that want to pursue a social mission as well as fulfilling their fiduciary responsibility to shareholders. We previously reported on Blockstack, which also reincorporated as a PBC.

In this way, shareholders in Kickstarter earn an income stream rather than hoping for a giant return on a big exit down the road. (The company has long committed to remaining private, and one of its three co-founders has compared a share in the company to owning the rights to a popular song.)

But despite any similarities, the company said this unique structure protects it from the temptation to leverage its brand for returns in the frothy ICO market.

“Not something we looked into or will look into,” the spokesperson said.

Kickstarter website photo via Shutterstock.

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Crowdfunding Giant Indiegogo Opens to ICOs

Indiegogo, the crowdfunding website, is getting into the initial coin offering (ICO) game.

The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services around the blockchain funding model. The first sale is for the Fan-Controlled Football League which, according to its website, is seeking to create a user-driven model for American football teams.

Specifically, accredited investors purchase Simple Agreements for Future Tokens (SAFTs), with the tokens set to be delivered at a later date. The mode has been used by a number of ICOs in recent months, and according to the page on MicroVentures, $915k has been raised from 9 investors thus far in the new ICO.

The launch is a notable one given Indiegogo’s size and influence in the crowdfunding platform ecosystem. Indiegogo first went live in early 2008, and the move comes more than a year after it moved to offer access to equity crowdfunding.

Through this lens, Indiegogo is effectively moving to bill itself as a new hub for ICOs – specifically, those that are compliant with U.S. regulations around securities.

In statements, the startup said that the move to embrace ICOs was a natural fit given its crowdfunding work to date, noting:

“In some ways, cryptocurrency and blockchain technologies are poised to change everything. But for us, this is simply another way of doing what we’ve been working on for the past decade. It’s a powerful way to help people unite around ideas that matter to them, and together make them come to life. Now, we’re ready to become the go-to platform for selling and investing in digital tokens and blockchain-based assets, and we can’t wait for you to join us.”

According to The New York Times, Indiegogo is working with law firm Cooley LLP on the initiative. Slava Rubin, one of the startup’s founders, told the publication that “we want to bring a brand of trust to the entire industry” through the ICO initiative.

Image via Indiegogo

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.