Indiegogo Bucks Trend Toward Niche Crowdfunding
Crowdfunding, the social media phenomenon that has helped thousands of innovators raise money through many small contributions, is growing fast. And it’s splintering into hundreds of new platforms serving niche clients such as book authors, app developers, and green entrepreneurs. But crowdfunding pioneer Indiegogo of San Francisco says it’s sticking to its founders’ original 2008 mission—to be the big tent with room for everybody.
That all-inclusive stance is Indiegogo’s most distinctive difference from its biggest early rival, Kickstarter of New York, founded in 2009. Kickstarter requires crowdfunding campaigners to pass a selective application review, and concentrates on fields such as theater, dance, the arts, and certain technologies. Indiegogo allows anyone to set up a fundraising campaign, from avant-garde artists to Zen-inspired tattoo shop owners.
“We had a baby crowdfunded on Indiegogo,” says co-founder Danae Ringelmann, referring to a recent campaign for a couple pursuing in vitro fertilization. The company’s territory spans charitable drives such as the Red Cross Hurricane Sandy relief project, as well as plain moneymaking endeavors such as technology startups.
Indiegogo’s latest move is literally aimed at covering the map. This month, the company expanded its operations in Germany, France, the UK, and Canada. The platform was always accessible globally, and 30 percent of its campaigns have originated outside the US. But now fundraisers can interact in two new languages, French and German. Contributors can also send funds in three new currencies: Canadian dollars, Euros, or pounds sterling.
“This is actually just the beginning,’’ says Ringelmann (pictured above). “We will have a lot more languages.”
Kickstarter also began accepting pounds sterling in October, when it opened its site to campaigners in the United Kingdom.
The selectivity of the New York crowdfunding site may lend some credibility to its chosen campaigns, and Kickstarter trumpets their successes. Seventeen projects have raised more than a million dollars, including Pebble Technology of Palo Alto, which reaped more than $10 million in May to support the development of its Pebble watch, an electronic-paper device that interacts with mobile phones. More than 340 other projects have collected between $100,000 and $999,999. Two short documentary films funded on Kickstarter have been nominated for Academy Awards.
Indiegogo, rather than vetting campaigns itself, relies on the collective vigilance of donors to thwart any fraudulent crowdfunders. But the company offers tips to help supporters spot the bad bets. A legitimate campaign page should be full of details, updates, and links to sites such as Twitter and Facebook, says Ringelmann. People who know the project creator should be first to jump in with pledges. “If the campaign doesn’t have at least 20 percent of their goal met within a few days, proceed with caution,” she says.
Indiegogo’s open-door policy could be seen as a tactic to maximize revenues. Crowdfunding sites make money by collecting a small percentage of the funds raised by its clients’ campaigns, plus credit card processing fees.
However, Ringelmann says the company’s all-embracing stance stems more from its core values than from its cash goals. She and her co-founders, Eric Schell and CEO Slava Rubin, came together over a common desire to … Next Page »