AIG has launched Crowdfunding Fidelity, a new solution that helps build investor trust in the emerging crowdfunding sector. Crowdfunding Fidelity is the world’s first insurance created to help protect investors on equity crowdfunding platforms against issuer fraud.
Crowdfunding platforms empower innovators to bring their ideas to life and help investors collaborate with start-ups and growth-stage companies located all over the world. Equity crowdfunding platforms award the investor shares of the company in exchange for helping to fund it.
As part of a sector “still in its infancy, equity crowdfunding platforms are only as strong as the confidence they instill in their investors,” said Lex Baugh, President of Liability and Financial Lines at AIG. Crowdfunding Fidelity “will help provide that confidence.”
Crowdfunding Fidelity helps ensure the underlying trustworthiness of the issuer, offering investors the protection they need to collaborate with emerging and developing companies. By choosing this new insurance solution, crowdfunding platforms can attract investors through trustworthiness and value.
Crowdfunding Fidelity is currently available for platforms in the UK and Canada. As more countries finalize regulations around companies raising capital through crowdfunding, AIG may have the potential to extend this solution to crowdfunding platforms around the world.
Eureeca, an equity crowdfunding platform registered in the UK and based in Dubai, is the first platform to purchase Crowdfunding Fidelity. AIG designed the solution in collaboration with Eureeca by engaging with Eureeca to gain a deeper understanding of the crowdfunding industry’s risks and discovering how to mitigate them.
“Crowdfunding Fidelity is a great example of how AIG learns together with the industries and clients it serves to better meet their strategic needs. We are looking forward to building similar relationships with other platforms across the world and to expanding our offering to this sector,” said Mr. Baugh.
Chris Thomas, Co-Chief Executive Officer and Founder of Eureeca said, “The new power of the crowd and the desire to democratize investing throughout the world can unleash great partnerships. The success of the ecosystem depends on collaboration between all stakeholders. AIG has demonstrated its commitment to being a valued insurer to this new industry by engaging the crowdfunding space at such an early stage.”