Who says entrepreneurs have to answer solely to traditional investors and banks? Indiegogo is one company that has been going strong in the crowdfunding platform kingdom. It is a realm where startup companies with potentially brilliant ideas can see their wings spread - a process made possible with the aid of fans inspired enough to supply a significant portion of the funds.
When you visit Indiegogo, expect your eyes to feast upon a wide, colorful, and, most of all, eclectic array of startup companies. The experience is analogous to the Museum of Modern Startups, donation capability included.
Rose Levy, spokeswoman of Indiegogo, talked to us about the essential components of Indiegogo’s business model, as well as its successes.
When thinking of Indiegogo’s array of successes, which come to mind?
The first one I think of is Satarii Swivl, formerly called Starii Star, the creators of “Star Accessory” - a product that makes your mobile camera follow your every move. They were initially rejected by investors and by loan banks, but the team pressed on and decided to use Indiegogo to fund the production costs of their personal, automated cameraman that works with any mobile phone. Now called the Swivl, the product has won awards at CES, has recently shipped, and is a hit for Satarii - now a rapidly growing startup of product designers and technology developers.
What is the most important thing to look for when choosing a crowdfunding platform for a project? What kind of incentives does your company offer entrepreneurs and startups that set you apart from the rest, if any?
Since launching in 2008, Indiegogo now has over 200 competitors. We are now the largest open funding platform in the world. Many of our competitors focus in one of the three major areas – like creative, cause, or entreprepreneur.
One of the benefits of working with Indiegogo is that we work across all types of campaigns, and you get the benefit of the funders being interested across all the different areas. Some other key points that differentiate IndieGoGo versus XYZ platform are that IndieGoGo is free and open to any campaign to start; that is, you can start a campaign from any country, you keep all the money you raise, we have the lowest fees, you can use different payment options including paypal and credit cards, we offer fiscal sponsorships through some of our key partnerships, and we reward efforts and activity through our gogofactor. Gogofactor gets entrepreneutrs more exposure than they could get on their own. The GoGoFactor is an algorithm which tracks activity – funding, promotion, comments, and updates. The higher your GoGoFactor, the higher on our promotional ladder you go. This includes being on our homepage, with millions of pageviews, to being included in our newsletter to hundreds of thousands of people, or getting placement through our press team.
How many people have achieved their funding goals?
Nearly half a million people. More than 90% of campaigns on Indiegogo that reach their goal offer perks. As long as you follow the suggestions on Indiegogo in terms of the insights of how to create a campaign, a majority of campaigns actually will hit their goal.
Does the recent passing of CROWDFUND Act in the Senate mean great, positive changes for your platform?
Simply through cutting regulations (at zero cost to taxpayers) is exactly how government can catalyze job creation, encourage the entrepreneurial spirit, and maximize the possibilities of online crowdfunding platforms like Indiegogo. All of us at Indiegogo are excited to further democratize fundraising.
There are more than 5,000 current funding projects on Indiegogo and now the law is finally catching up to technology. We bank online, shop online, and there's no reason we shouldn't be able to help create jobs online. We're excited to see how this bill will democratize fundraising. As demand develops for equity crowdfunding we expect to enter that space.
How does crowdfunding fit into the financial cycle? How do you think it shifts financial control?
Unclear at this point. We will be able to know more in about nine months
Who would not be a good candidate for crowdfunding? Why?
Someone who isn't willing to put the work into making their campaign successful. The campaigns that find the biggest challenges are the ones that believe you can just post it and funders will come. No one wakes up in the morning and says, “I wonder what zero funded campaign I can go give money to today.” A successful funding campaign will take effort, and the more effort anyone puts into it, the more Indiegogo will amplify them even further.
What securities do you offer investors?
To be clear, people contributing money on Indiegogo are not investing in campaigns for equity, so they are not technically investors. However, fraud has occurred in less than one percent of the projects offered through Indiegogo. The site uses algorithms similar to those used by companies like MasterCard and Visa to protect against fraud.