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AIG launches insurance for equity crowdfunding investors
Product aims to give investors more confidence in the process
Staff on May 31, 2016
Crowdfunding can be the engine behind a 3D iPhone camera or a jacket with a built-in neck pillow. But it also has obvious risks for investors.
Campaigns can solicit funds under misleading pretenses or with the sole intention of cancelling the project. Even when a campaign isn’t a scam, bumps in a manufacturing process can mean delayed outcomes and sometimes a request for more funds.
Now, AIG has launched a new insurance product in Canada and the UK to protect those who invest in equity crowdfunding campaigns, one that allows startups to reach a broad range of investors. In exchange for their financial support, investors receive shares in the new company.
Lex Baugh, President of Liability Lines at AIG says, “equity crowdfunding platforms are only as strong as the confidence they instill in their investors.” The company believes the new product will help instill that confidence, and it hopes that crowdfunding platforms will be able to attract more investors through that trustworthiness.
To design the product, AIG worked with a crowdfunding platform called Eureeca. The platform was the first one to purchase the product.
AIG launches insurance for equity crowdfunding investors
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