Crowdfunding platforms and initiatives have emerged in the past several years as a new (and in my opinion, brilliant) way to support and fund local start-ups, creative endeavours, international outreach efforts, and/or essentially anything you might need/want to raise money for. I love how these platforms help level the playing field for artists and entrepreneurs whose dreams are bigger than their wallets/networks and how they elevate the role of consumer to that of investor.
The two main players out there right now are Kickstarter (based in the lower east side of NYC) and Indiegogo (based in SF, California) . Since the launch of Kickstarter in 2009, more than 4 million people have pledged nearly $600 million for more than 40,000 creative projects. Indiegogo describes itself as “The world’s funding platform” and describes its mission with the simple and cheeky statement “Go fund yourself.” Both sites operate on the same basic premise: create momentum and rally people around an idea. The sites provide you with a platform to describe your product/goal/idea, set a funding goal, tell people how they can help and identify the perks they’ll get for becoming a contributor (from name recognition to a pre-market product). Project developers keep 100% ownership, but pay the host site a small percentage of funds raised. Both sites rely heavily on social media to promote the projects, but differ in the role the host site plays.
Funding on Kickstarter is all-or-nothing — projects must reach their funding goals to receive any money. According to the website, 44% of projects have reached their funding goals to date.
Indiegogo on the other hand gives users the option of “flexible funding.” 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 but with a 9% fee. Unlike Kickstarter, Indiegogo also disburses the funds immediately, when the contributions are collected through the user’s PayPal accounts.
There are loads of websites out there comparing the two platforms and if you are considering going this route as a project developer, I would certainly encourage you to do your research. That said, as a consumer/investor/researcher, I found Indiegogo to be far more intuitive and to have a much better built in method of promotion. I am not looking for funding, per se, but I quickly became hooked on scouring the projects on Indiegogo where you can browse by both subject and city. From well building projects in Africa to playwrights and filmmakers seeking funding in Toronto, I already have a long list of initiatives I’d like to throw my support behind. There are few people out there with millions of dollars to throw at a good idea. There are, however, millions of people with one dollar. Therein lies the awesomeness of crowdfunding.