A minnow of English soccer, Stevenage FC, is an unlikely candidate to be at the forefront of financial innovation in the game.

Yet it has become the first soccer club in the world to sell bonds directly to its fans online via crowdfunding, according to the organisers of the deal.

Stevenage, in England's fourth division, raised 600,000 pounds ($796,000) in September via a five-year bond to rebuild a stand in its stadium. It is set to be followed by Frosinone Calcio of Italy's Serie B second division which unveiled a bond worth up to 1.5 million euros ($2.60 million) on Monday.

Tifosy, the crowdfunding platform behind the deals, was founded by former Italy, Juventus and Chelsea striker Gianluca Vialli, along with a former Goldman Sachs banker and two other investors. The company's name is a play on the Italian word ‘tifosi' meaning fans.

The figures at stake may be small so far but Vialli said he and his partners were aiming higher.

"We're close to finalising something with a big club in Serie A and an (English) Premiership club as well," he told Reuters in an interview. "We're also talking to many other clubs in football, rugby and cricket."

He added Tifosy takes a 4-6 percent cut of all funds raised.

Such fundraising offers a new source of income to smaller sports clubs who don't have the access to international capital markets, and can give fans another way of supporting teams.

But it comes with risks for investors.

The Stevenage and Frosinone bonds cannot be traded and their holders would only be repaid after senior creditors such as banks in the event of a default.

There are also perils associated if the team performs poorly on the pitch. In Stevenage's case, if the club is relegated in the last year of the bond the repayment is delayed by one year.

If a club sees its revenue slump due to poor performance, it may not be able to repay bondholders.

"The risk is high for fans investing in their clubs ... that they will lose all their money or that they are not compensated for the risks they bear," said Luca Enriques, a law professor at Oxford University who has researched crowdfunding, where businesses raise cash directly from small investors online.

Stevenage bondholders can choose to either get a 4 percent gross annual interest in cash or 8 percent in credit that they can spend on the club's products, such as merchandise, food and drink.

Frosinone's bond comes with a 5 percent cash coupon plus 3 percent in credit. Proceeds will be used to build a restaurant, a health centre and some shops around the club's new stadium.

At a time when a five-year UK or Italian government bond yields less than 1 percent, this may look like a good return.

But, by comparison, investors can get a 6 percent yield by buying the debt of Premier Foods, the owner of brands including Mr Kipling cakes and Oxo stock cubes, with an equivalent maturity .

Unlike Stevenage or Frosinone, listed companies such as Premier Foods are obliged to publish their accounts regularly. Their debt is rated by independent agencies and can be traded on the market.

Finbarr O'Connell of accountancy firm Smith & Williamson, who helped now dissolved Formula 1 team Caterham raise donations in 2014, said selling subordinated debt to fans took crowdfunding too far.

"These people are fans and put their money in but their liability may be somewhere in the balance sheet where they have little or no hope they'll ever receive it," he said.

The risks associated with the Stevenage bonds are clearly laid out in the documentation and investors are also asked to self-certify as experienced or wealthy before applying to buy the bonds online.

Carole Le Grand, a 65-year old Stevenage fan who invested 1,000 pounds after a small lottery win, said she could not remember her answers to the questionnaire but would not fall into either category.

"It was about supporting the club," said Le Grand, who runs the Stevenage branch of a befriending service for the mentally disabled.

She added another reason for investing was the prospect of influencing the design of the North Stand to make it more accessible for the disabled, although it was unclear whether this would happen.

Fausto Zanetton, the former banker at Goldman Sachs and Morgan Stanley who co-founded Tifosy, said clubs are vetted carefully. "We've said no to many clubs because we were not comfortable," he told Reuters.

Stevenage has been owned for nearly 20 years by Phil Wallace, a British businessman who is CEO of food-trading company Lamex Food Group.

Frosinone's Chairman Maurizio Stirpe, who has been in charge since 2003, told Reuters the club could have borrowed more cheaply from a bank but opted for crowdfunding instead.

"Our main objective is to foster fan loyalty," he said.