Indiegogo

Indiegogo

Type of site	Crowdfunding
Available in	English, German, French, Spanish
Headquarters	San Francisco, California, U.S.
Website	indiegogo.com
Alexa rank	1,251 (August 2016)[1]
Launched	January 2008
Current status	active

Indiegogo /ˌɪndiˈɡoʊɡoʊ/ is an international crowdfunding website founded in 2008 by Danae Ringelmann,^[2] Slava Rubin, and Eric Schell. Its headquarters are in San Francisco, California. The site is one of the first sites to offer crowd funding. Indiegogo allows people to solicit funds for an idea, charity, or start-up business. Indiegogo charges a 5% fee on contributions. This charge is in addition to credit card and PayPal charges that range from 3.5% to 9%. Fifteen million people from all around the world visit the site on a monthly basis. ^[3]

The site runs on a rewards-based system, meaning donors, investors, or customers who are willing help to fund a project or product can donate and receive a gift, rather than an equity stake in the company.^[4] Following changes in Security and Exchange Commission earlier in 2016, Indiegogo has partnered with MicroVentures to offer equity-based campaigns beginning in November 2016, allowing unaccredited investors to participate with equity stakes.^[5]

In 2014, Indiegogo launched Indiegogo Life, a service that people can use to raise money for emergencies, medical expenses, celebrations, or other life events. Indiegogo Life does not charge a platform fee, so fundraisers keep more of the money they raise.^[6] In 2015 Indiegogo Life was renamed to Generosity.com.^[7]

History

In 2002, while working as an analyst on Wall Street, Danae Ringelmann co-produced a reading of an Arthur Miller play. Though the performance was popular with audiences, there was little financial incentive available, and Ringelmann decided to seek alternative revenue streams.^[8] Ringelmann was originally inspired to work with independent filmmakers and theater producers after a filmmaker 50 years her senior saw she worked at JPMorgan and asked her to fund his film.^[8][9][10] In 2006, Ringelmann went on to the Haas School of Business to start a company she felt would "democratize" fundraising.^[8][9] There she met Eric Schell and Slava Rubin, who had had similar experiences with fundraising.^[10] Schell had previously worked with The House Theater Company in Chicago,^[11] while Rubin had started a charity fundraiser for cancer research, after losing his father to cancer as a child.^[12]

Ringelmann, Schell, and Rubin developed their concept in 2007, under the name Project Keiyaku.^[13][14] The site officially launched at the Sundance Film Festival in January 2008, with a focus on film projects.^[9] In June 2010, MTV New Media partnered with Indiegogo to develop new content from the site's projects.^[15] In September 2011, the company raised a $1.5 million Series Seed financing round, led by Metamorphic Ventures, ff Venture Capital, MHS Capital and Steve Schoettler, Zynga's co-founder.^[16] In February 2012, President Barack Obama's Startup America partnered with Indiegogo to offer crowdfunding to entrepreneurs in the U.S.^[17]

In June 2012, Indiegogo raised a $15 million Series A round from Insight Ventures, Khosla Ventures and Steve Schoettler, Zynga's co-founder.^[18] In January 2014, a Series B round of funding added $40 million to bring the total venture capital raised to $56.5 million.^[19][4]

Crowd funding

In an interview with Film Threat, Rubin said the site is “...all about allowing anybody to raise money for any idea.”^[20] Users can create a page for their funding campaign, set up an account with PayPal, make a list of "perks" for different levels of investment, then create a social media–based publicity effort. Users publicize the projects themselves—through Facebook, Twitter and similar platforms. The site levies a 5% fee for successful campaigns. For campaigns that fail to raise their target amount, users have the option of either refunding all money to their contributors at no charge or keeping all money raised minus a 9% fee.^[21] Unlike similar sites such as Kickstarter, Indiegogo disburses the funds immediately, when the contributions are collected through the user's PayPal accounts. Indiegogo also offers direct credit card payment acceptance through their own portal. Those funds are disbursed up to two weeks after the conclusion of a campaign.^[22] According to The Wall Street Journal, as of January 2014 over 200,000 campaigns have been launched, raising "millions of dollars" to people running crowdfunding campaigns in 70 to 100 countries every week.^[19] Already-funded projects also use Indiegogo, to create publicity or find distributors.

A few of the successful Indiegogo campaigns include:

• "Lets Give Karen – The bus monitor – H Klein A Vacation!", which raised $703,833,^[23]
• Stick-N-Find, which has raised $861,165,^[24]
• Bug-a-Salt, which raised $577,546,^[25]
• Let's Build a Goddamn Tesla Museum, which raised $1.3 million,^[26]
• The Storm Electric Bike, which as of 19 February 2015 has raised $3.5 million from 6,293 funders. ^[27][28]
• SuperMeat, an Israeli company designing a method to produce a meat-equivalent product without animal slaughter by cultivating tissue samples taken from a chicken and developing them into a market-ready meat product.^[29]

On 24 July 2013, Canonical Ltd. launched its crowdfunding campaign via Indiegogo to raise $32 million for the Ubuntu Edge smartphone.^[30] This is the highest target set for any crowdfunding campaign.^[31] However, the campaign only raised $12.8 million, falling short of its target, and no funds were disbursed.^[32]

In February 2014, Indiegogo launched an unsuccessful funding campaign for the Wikipedia Books Project, which had planned to print the entire English Wikipedia in book form later in the year.^[33][34]

In April 2014, after being shown clear evidence of fraud, Indiegogo responded by deleting their anti-fraud guarantee.^[35]

Top projects by funds raised

Campaign rules

Users between the ages of 13 and 17 may not use the site without a parent or legal guardian's consent. Campaign owners may not create a campaign that tries to raise funds for illegal activities, or that is clearly made up or claiming to do something impossible.

If the campaign offers perks, it can't offer any forms of interest in the company or venture, or any financial incentive. The campaign cannot offer alcohol, drugs, weapons or ammunition, or any form of lottery or gambling. A campaign can not promote ideas or opportunities of hate, personal injury, death, or damage of property, or anything that can be distributed that violates another person's rights.^[43]

Reception

Along with Kickstarter, Indiegogo is one of the most popular crowdfunding websites in America and is generally well received by its users. The majority of reviews praise Indiegogo's ease of use and customer support, while some criticize the site's inability to draw in funding from strangers. Indiegogo is more tolerant of projects and has looser guidelines than Kickstarter. The site lets people fund campaigns that Kickstarter would not.^[44]

Patent disputes

On 23 January 2015 a patent infringement lawsuit was filed by Alphacap Ventures LLC against multiple crowdfunding platforms, including Indiegogo, CircleUp, GoFundMe, Kickstarter, Gust, RocketHub and Innovational Funding.^[45]

See also

• Civic crowdfunding
• Comparison of crowd funding services
• Open-source hardware

References

External links

• Official website