Indiegogo

Indiegogo /ˌɪndiˈɡoʊɡoʊ/ is an American crowdfunding website founded in 2008 by Danae Ringelmann,[1] 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 Stripe credit card processing charges of 3% + $0.30 per transaction.[2] Fifteen million people visit the site each month.

For the Indianapolitan public transit service, see IndyGo. For the Philadelphia bicycle-sharing service, see Indego.

Indiegogo
Screenshot
Type of site
Crowdfunding
Available inEnglish, German, French, Spanish
Headquarters
San Francisco, California, U.S.
OwnerIndiegogo, Inc.
Created by
  • Slava Rubin
  • Danae Ringelmann
  • Eric Schell
URLwww.indiegogo.com/about/our-story
LaunchedJanuary 2008 (2008-01)
Current statusactive

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.[3] Following changes in Security and Exchange Commission rules 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.[4]

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 did not charge a platform fee. In 2015 Indiegogo Life was renamed to Generosity.com.[5] Donors use solely credit cards to donate, and processing is conducted by Stripe.[6] Stripe's processing fees of 3% plus 30 cents of every donation still apply.[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] 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.[14] 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.[15] In February 2012, President Barack Obama's Startup America partnered with Indiegogo to offer crowdfunding to entrepreneurs in the U.S.[16]

In June 2012, Indiegogo raised a $15 million Series A round from Insight Ventures, Khosla Ventures and Steve Schoettler, Zynga's co-founder.[17] In January 2014, a Series B round of funding added $40 million to bring the total venture capital raised to $56.5 million.[3][18] David Mandelbrot (the company's then-COO) was named CEO in January 2016.[19]

In May 2019, CEO David Mandelbrot stepped down for personal reasons.[20] He was succeeded by former Reddit core-product leader Andy Yang.[21]

Products

Crowd funding

In an interview with Film Threat, Rubin said the site is “...all about allowing anybody to raise money for any idea.”[22] Users can create a page for their funding campaign, 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.[23] This option must be selected before the campaign begins, and the goal will be listed, directly underneath the amount raised, as fixed (only receive funds if goals is met) or flexible (will receive funds if goal is not met). Indiegogo doesn't provide prospective backers with any means to contact campaigns to ask questions or make suggestions before they decide to participate.

Indiegogo offers direct credit card payment acceptance through their own portal. Those funds are disbursed up to two weeks after the conclusion of a campaign.[24] As of August 2017, Indiegogo does not offer PayPal as an option for contributions.[25] Indiegogo does not stand behind campaigns once they have been funded, responding to a complaint of non-delivery of promised rewards, "each crowdfunding campaign is run by the individual campaigner who is solely in charge of distributing any perks offered. Indiegogo does not guarantee that the perks offered by the campaigner will be produced or delivered." [26] 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.[18] Already-funded projects also use Indiegogo, to create publicity or find distributors.

A few of the successful Indiegogo campaigns include:

On 24 July 2013, Canonical Ltd. launched its crowdfunding campaign via Indiegogo to raise $32 million for the Ubuntu Edge smartphone.[35] This is the highest target set for any crowdfunding campaign.[36] However, the campaign only raised $12.8 million, falling short of its target, and no funds were disbursed.[37]

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.[38][39]

In April 2014, after being shown clear evidence of fraud, Indiegogo responded by deleting their anti-fraud guarantee.[40]

Top projects by funds raised
Five largest successfully completed Indiegogo projects by total funds pledged (only funded projects are listed)[41]
Total USDProject nameCreatorCategory% fundedBackersClosing date
$12,174,187Flow Hive[42]Honey Flow[43]Technology17,38536,6532015-03-07
$5,859,412Sondors Electric Bike[44]Storm SondorsTechnology6,85514,6462015-04-02
$5,048,213Restore King Chapel Now[45]Elise DurhamEducation632822015-05-22
$5,022,943An Hour of Code for Every Student[46]Code.orgEducation26,5702,8012014-12-14
$4,511,301Super Troopers 2[47]Broken Lizard IndustriesFilm21552,5322015-04-24

InDemand

In 2014, Indiegogo introduced their Forever Funding[48] program, which allows crowdfunding campaigns to continue to raise funds after their initial campaign period has ended, which was later renamed “InDemand”.

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.[49]

Reception

Along with Kickstarter, Indiegogo is one of the two most popular donation-based crowdfunding websites. Indiegogo has looser guidelines than Kickstarter, letting users fund campaigns that Kickstarter would not, for instance Kickstarter does not allow funding of Healthcare projects.[50] Indiegogo has been criticized for not protecting backers from scammers. For example, a scammer took about $5 million and didn't ship anything for more than a year, but Indiegogo has not taken any action.[51]

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.[52] The case was ultimately dismissed by the presiding judge, with prejudice, for having been filed in bad faith; as was admitted by the plaintiffs.[53]

See also

References
  1. "Triangulation 187 Indiegogo Founder Danae Ringelmann". TWiT.tv. Retrieved 10 October 2019.
  2. "Indiegogo Pricing and Fees". Indiegogo. Retrieved 10 October 2019.
  3. Lora Kolodny. "Early Crowdfunding Player Indiegogo Brings On Famous New Investors". WSJ.
  4. Cowley, Stacy (15 November 2016). "Ever Wanted to Back a Start-Up? Indiegogo Opens the Door to Small Investors". New York Times. Retrieved 15 November 2016.
  5. Stacy Cowley (21 October 2015). "ndiegogo Creates Generosity.com for Personal Fund-Raising Campaigns".
  6. "Terms of Use | Generosity". www.generosity.com. Retrieved 14 March 2017.
  7. "Indiegogo Life Helps You Fund Good Deeds". TechCrunch. Retrieved 10 October 2019.
  8. Danae Ringelmann (2011). Leveling the Funding Playing Field, One Dollar at a Time.
  9. Sacks, Danielle (3 March 2010). "Danae Ringelmann, cofounder of IndieGoGo". Fast Company. Retrieved 16 June 2012.
  10. "Danae Ringelmann, MBA 08". CalBusiness. Berkeley, California: Haas School of Business at the University of California, Berkeley. Retrieved 16 June 2012.
  11. "Eric Schell". CrunchBase. Retrieved 16 June 2012.
  12. "Can You Spare a Quarter? Crowdfunding Sites Turn Fans into Patrons of the Arts". Knowledge@Wharton. Philadelphia: The Wharton School of the University of Pennsylvania. 8 December 2010.
  13. Kirsner, Scott (31 March 2007). "Filmmakers hope for online funds". Variety. Retrieved 10 October 2019.
  14. Ringelmann, Danae (7 June 2010). "Calling All IndieGoGo Creators – MTV New Media Wants You!". Indiegogo Blog. Indiegogo.
  15. Roush, Wade (7 September 2011). "Wednesday Deals Roundup: IndieGoGo, Project Frog, BlueArc".
  16. Loten, Angus (22 April 2011). "'Startup America' Embraces Crowd-funding". In Charge. The Wall Street Journal.
  17. Taylor, Colleen (6 June 2012). "Indiegogo Raises $15 Million Series A To Make Crowdfunding Go Mainstream". TechCrunch.
  18. Kolodny, Lora (28 January 2014). "Indiegogo Raises $40M in Largest Venture Investment Yet for Crowdfunding Startup". The Wall Street Journal.
  19. "Indiegogo CEO Slava Rubin Moves To A New Role, To Be Replaced By Current COO". TechCrunch. Retrieved 7 October 2019.
  20. "Time To Move On". www.linkedin.com. Retrieved 7 October 2019.
  21. Stephen, Bijan (22 May 2019). "Indiegogo's CEO steps down amid layoffs". The Verge. Retrieved 23 May 2019.
  22. "Wake Me Up Before You Indiegogo: Interview With Slava Rubin". Film Threat. Retrieved 16 December 2010.
  23. "Learn More". Indiegogo. Retrieved 16 June 2012.
  24. Needleman, Sarah (1 November 2011). "When 'Friending' Becomes a Source of Start-Up Funds". The Wall Street Journal. Retrieved 5 December 2011.
  25. "Why is PayPal no longer available for my campaign?". Indiegogo Help Center. Retrieved 19 June 2018.
  26. Letter to donor of 21 December 2017
  27. Todd Essig (18 April 2012). "Why Raising 2/3 of a Million Dollars For Bus Monitor Karen Klein Was So Easy". Forbes. Retrieved 28 October 2012.
  28. "StickNFind – Bluetooth Powered ultra small Location Stickers". Indiegogo. 27 November 2012. Retrieved 20 January 2013.
  29. "BugASalt – The Final Push". Indiegogo. 11 September 2012. Retrieved 28 October 2012.
  30. Doug Tennapel. "Erthworm Jim: The Comic Book".
  31. "Tesla Museum Supporters Raise $1.3 Million Over Indiegogo – Eric Johnson – News". AllThingsD. 29 September 2012. Retrieved 28 October 2012.
  32. "Storm Electric Bike". Indiegogo. 2 February 2015. Retrieved 19 February 2015.
  33. "Is the $500 Storm e-bike too good to be true? Looks like". Treehugger. 5 February 2015. Retrieved 5 February 2015.
  34. Lulu Chang (11 July 2016). "SuperMeat wants you to try its lab-grown chicken breast". Digital Trends.
  35. Charles Arthur. "Go ahead and order an Ubuntu Edge – but you'll wish you'd bought a tablet". The Guardian.
  36. Jeff Parsons (23 July 2013). "Ubuntu Edge smartphone breaks crowdfunding record". T3.com.
  37. Brodkin, Jon. (22 August 2013) Ubuntu Edge is dead, long live Ubuntu phones. Ars Technica. Retrieved on 21 September 2013.
  38. Alison Flood (20 February 2014). "Wikipedia 1,000-volume print edition planned". The Guardian. Retrieved 22 February 2014.
  39. "The Wikipedia Books Project". Indiegogo. 11 April 2014.>
  40. "After Pando shows clear evidence of fraud, Indiegogo responds by… deleting anti-fraud guarantee". PandoDaily.
  41. "ALL CATEGORIES – Most Funded". Indiegogo.com. 10 June 2015.
  42. "Flow Hive: Honey on Tap Directly From Your Beehive". Indiegogo. Retrieved 7 March 2015.
  43. Flow Team (22 February 2015). "Honey On Tap From Your Bee Hive!". Retrieved 7 March 2015.
  44. "Sondors Electric Bike". Indiegogo. Retrieved 10 June 2015.
  45. "Restore King Chapel Now. Every Day & Dollar Counts". Indiegogo. Retrieved 19 February 2015.
  46. "An Hour of code for every student". Indiegogo. Retrieved 19 February 2015.
  47. "Super Troopers 2". Indiegogo. Retrieved 19 February 2015.
  48. Constine, Josh. "Indiegogo Tries "Forever Funding" Campaigns Without End Dates". TechCrunch. Retrieved 30 January 2018.
  49. "Terms of Use". indiegogo.com.
  50. Chance Barnett (9 September 2013). "Donation-Based Crowdfunding Sites: Kickstarter Vs. Indiegogo". Forbes.
  51. "PrinCube-The World's Smallest Mobile Color Printer". Indiegogo. Retrieved 1 November 2020.
  52. "Details Emerge on Patent Lawsuit Against Multiple Crowdfunding Platforms". crowdfundinsider.com.
  53. "Victory - Gust Wins Crowdfunding Infringement Case Against Alphacap Ventures". crowdfundinsider.com.
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