Fund fast: The world's second largest public fund raising platform, Indiegogo, is becoming more and more popular
You have an idea and want to realize it, but you lack financial resources? One of the popular answers today is in the public finance platforms. A decade ago, however, this opportunity did not exist, and even less it was perceived as a legitimate way to raise capital for a business idea. In 2008, however, Indiegogo was born, which is today the second largest fundraiser after Kickstarter (that was a year later) and changed everything.
"Our development over the past ten years is on a fast pace, because we always want to be the best in the industry," says Joel Hughes, director of European business at Indiegogo. Hehelps startup companies to raise funds through crowd funding and was among the speakers at the DIGITALK conference organized by Capital and the LAUNCHub Ventures funds and NEVEQ..
"The most important thing about us are the people who donate through the platform and the entrepreneurs who are raising funds through us," says Hughes.
The very idea of Indiegogo was born six years before the official launch of the platform when one of the co-founders of the project, Dene Ringelman, decided to look for an alternative way to finance Arthur Miller's play. A little later she met Slawa Rubin and Eric Shell and in January 2008 Indiegogo was officially launched.
Through Indiegogo, users offer a project and allow other members of the platform to fund it through their own micro-grants. The company receives 5% of each donation, separately charging 3% for translation and 30 cents for each transaction. Unlike traditional fund raising, investors do not receive a share in the company or the project. Instead, in most cases, they receive gifts from the fundraising staff. Since 2016, Indiegogo works with MicroVentures so that investors can still enter as shareholders in the companies they finance. So far, this option remains relatively unpopular in comparison with the traditional platform model.
$ 1.4 billion later
"Since Indiegogo has started, over 1 million campaigns have been launched and more than $ 1.4 billion have been raised," says Hughes. By this indicator, which is the most important for each fundraising site, Indiegogo only rewards Kickstarter, which has so far received $ 1.9 bn in nine years. According to Hughes, crowd funding is becoming more and more popular. "We see the difference even when compared to five years ago, platforms like ours continue to be leaders, and we are constantly providing innovative opportunities for entrepreneurs to connect with new customers."
According to Hughes, North America continues to be a leader as a public fundraising region because the continent itself is a consumer. In the past three years, however, there has been a surge in the number of campaigns coming from China, South Korea and Europe. "I do not see how this trend will slow down in the near future," Hughes said.
Looking for a successful campaign
One of Hughes's main tasks is to have as many successful campaigns as possible in Indiegogo. "Many people think that this type of fundraising is easy, which is simply not true. My advice to entrepreneurs is to adhere to a formula that works. The relationship with a growing Indiegogo society is one of the most important things," says he. "Otherwise, it's like organizing a party and inviting no one to it. People will not know about your project unless you tell them yourself."
Some campaigns in Indiegogo are failing anyway. The reasons for the unsuccessful fundraising are different, but they are often related to the lack of a link between the project authors and the donors in the platform. Hughes says that despite the attempts by the Indiegogo team to do as many campaign checks as possible, failures are beyond the control of the company. "We are doing our best to have a good experience at the Indiegogo, but we can not prevent the failure of some campaigns," he says.
At the end of last year, Indiegogo began not only to raise funds through its platform but also to sell the finished products. Hughes tells us that the company is always looking for new ways to encourage its consumers to search for interesting goods in Indiegogo. "We started the Indiegogo Marketplace last year to allow well-established high quality sellers to sell on the site and give our donors something different."
The next step
It is still unclear what exactly the future holds not only for Indiegogo but also for the other fundraising platforms. In December 2017, Indiegogo allowed its users to use the site and raise funds through ICO. Now the company, which is constantly seeking to add new features, will also look at expanding its business.
"I would like to see a broader approval of the crowdfunding in markets where we have not been strong before - Asia, Europe and Africa, where there are many talented entrepreneurs with great ideas," says Hughes.