Indiegogo is the crowdfunding website which was founded in 2008 with its headquarters in San Francisco California. The founders of Indiegogo are Danae Ringelmann, Slava Rubin, and Eric Schell.
This is the first crowdfunding website which was established that allowed people to solicit funds for an idea they had regardless of whether it was for charity, a startup business or any other reason.
Indiegogo has approximately 15 million visitors every month to its website and is the number one crowdfunding platform despite imposing a 5% fee on contributions in addition to credit card and PayPal charges which range from 3.5% to 9%.
THE MODEL OFFERED BY INDIEGOGO
This crowdfunding platform operates a reward based system which can be used by its customers to attract donors or investors that are willing to help fund a project or a product and receive gifts from the promoter in return for their investments they make. Investors are not allowed a stake in the company they are making an investment in.
People that are trying to introduce a product into the market and do not have the funds necessary to do so can use the crowdfunding platform to acquire sponsors to create the product. The crowdfunding platform does not allow the promoters to offer cash rewards in return for the investment made by individuals who are only allowed to offer the rewards in kind.
CAMPAIGN RULES APPLIED BY INDIEGOGO
- Individuals between the ages of 13 and 17 are not allowed to use the site unless they are doing so with the help of their parents or a guardian.
- Campaign owners are not permitted to raise funds for illegal activities such as terrorism or to finance the drug trade. They are neither allowed to make claims that may seem impossible to believe.
- Financial incentives cannot be offered by the campaign owners who must refrain from giving away any interest from their venture or company.
- Campaign owners cannot offer alcohol, drugs, weapons, ammunition or any sort of gambling from the campaigns they create.
- Ideas or opportunities to promote hate, personal injury, death, damage to property or material that can be distributed and violates the rights of another person is also prohibited.
Campaign owners are required to understand that crowdfunding is an all or nothing platform which clearly indicates they can receive all the money that is contributed by participants before the end of the campaign date. If a single campaign manages to collect funds in excess of the campaign value, the campaign owner is the sole beneficiary of the additional funds.
The campaign, however, will not be closed when the target amount has been reached and will continue until the closing date. However, if the campaign does not generate the funds required, the campaign owner will not benefit in any way. The campaign will end on the closing date and any funds accrued will remain with the crowdfunding platform.
THE POPULARITY OF INDIEGOGO
Indiegogo along with Kickstarter is one of the two popular crowdfunding websites that are donation-based. The guidelines set forth by Kickstarter are stricter than Indiegogo and this could be the reason for the higher popularity of the latter.
HOW TO CREATE A CAMPAIGN ON INDIEGOGO
The campaign owner will have to decide the type of campaign he or she wants to create on Indiegogo. They will be able to get all the necessary information by visiting the website of Indiegogo and looking around for the information they need. Creators of a campaign are required to understand their chances of succeeding with a campaign will increase significantly if they decide to provide proper information about their products or services without holding back any information. Creating a video of the campaign will also prove beneficial because it has been proven that they are twice as successful as other campaigns.
Crowdfunding is becoming a successful way of generating funds for products and services and is perhaps a method that will be used for a long time to come.