Indiegogo is a powerful crowdfunding website that has brought more than 800,000 innovative ideas to life since 2008.
You can use the crowdfunding platform to tap into their large network of backers and supporters that love discovering new groundbreaking creative and technological projects.
Despite all that you’ve heard about Indiegogo, you might be unsure of launching a fundraiser on their site. Maybe you’re considering Kickstarter instead, or an entirely different way of getting funding.
With this article, I want to reveal some of the major pros and cons of using Indiegogo, particularly for beginners. You’ll gain a crystal clear understanding of who this website is best for and what steps you should take next to get funding for your business.
You’re just about ready to get funding for your project. Before we launch, let’s examine some of the major benefits of using Indiegogo.
Indiegogo Pros and Benefits
With more than 19,000 campaigns launched on Indiegogo every month, the team is doing something right. Entrepreneurs, artists, and creative types are drawn to their website for a few key reasons.
1. Indiegogo InDemand: Keep Raising Funds Post-Campaign
One of the major draws of the Indiegogo crowdfunding website is that as a campaign creator, you can continue to raise money after a successful fundraiser.
After you successfully complete your fundraiser on Indiegogo OR Kickstarter, you can enter the InDemand program, where you’ll be able to capitalize on any buzz you created before the project started.
While in the InDemand program, you don’t need to set a fundraising goal or fundraising duration. You’ll be continually raising money from website visitors. You can also update your page with new announcements.
I’ve watched many campaigns start on Kickstarter and then transition over to the Indiegogo InDemand program once they were successfully funded.
2. Fixed or Flexible Funding: All-or-Nothing or Keep What You Raise Campaign
Unlike Kickstarter, on Indiegogo, there are different types of fundraisers that you can launch. These come in the form of “fixed” or “flexible” funding.
Fixed funding: You must hit or exceed your fundraising goal in order to keep the money that’s been raised.
Flexible funding: You can keep the money that you’ve raised, whether or not you hit your fundraising goal.
These two fundraising models give more FLEXIBILITY (pun intended) to your campaign launch. Just remember that under both models, you still need to ship out the perks and rewards you’ve promised.
3. Projects, Charity, and Equity Crowdfunding
Yes – you can launch an Indiegogo campaign for a creative or entrepreneurial project. There are tons of individual categories on the website, like Film, Tech & Innovation, Comics, Theater, and more.
Additionally, you can also raise money for charity or personal causes on Generosity. At the time of writing, Generosity was transitioned over to YouCaring, which was then acquired by GoFundMe. This means that Indiegogo has now moved their charity fundraising to GoFundMe.
Along with charity fundraising, you can also raise money for an equity crowdfunding campaign using Indiegogo. Indiegogo is partnered with Microventures to be able to offer this to their community.
In total, you can raise money for many different projects on Indiegogo, not just technological innovations.
Indiegogo Cons and Drawbacks
As much as I love this website, there are some negatives to using their service, along with some things that you gotta be aware of before launching! I’m being super transparent here, but still take everything with a grain of salt, as each project is different.
4. Not as Popular as Kickstarter
Just being honest here – Indiegogo is not as popular as Kickstarter when it comes to most metrics like total funding dollars or successful projects launched. Kickstarter is more more well-known than Indiegogo.
This is a drawback because it means that you won’t have as big of a community of backers to tap into when you launch. The Kickstarter backer community is larger. You’ll have less strangers on the website that will discover your campaign.
On the flip side, it also does mean that Kickstarter is more competitive. When a marketplace has more entrepreneurs looking to get funding, then there will be more competition for the funders that are out there. Make sense?
5. You ALWAYS Must Ship Your Perks or Rewards
Hear me out. Let’s just say that you set a $10,000 fundraising goal, are doing a flexible funding campaign, and you only raise $5,000.
Yes – you get to keep that money. However, you also gotta ship out the rewards to the people who have claimed them. If you needed $10k in order to put in a manufacturing order, then you gotta come up with $5k somewhere else.
For inexperienced crowdfunders, this can put them into a bind. They didn’t realize that they still had to ship out their rewards to their backers. The same goes for when you enter the InDemand program. You gotta SHIP when people BUY.
In contrast, on Kickstarter, there are only all-or-nothing fundraisers, meaning that there is less danger of this pitfall occuring. The entrepreneur is getting the funding amount they asked for, and then going out there and placing an order with the manufacturer.
6. You Must Pay Fees to Indiegogo
For a standard crowdfunding campaign, you’ll be paying a 5% fee to Indiegogo, plus payment processing, which is about 3% + $0.30 per transaction.
When running an InDemand campaign, you’ll experience the same fees unless you did your initial fundraiser on another website like Kickstarter. In that case, you’d be paying 8% in fees plus payment processing. You’d be paying a bit higher than 8% if you get support from the team.
You have to weigh your options. If you were to set up your own online store, you wouldn’t be paying fees to a third party. The same goes for if you were to set up your own fundraiser on your own website.
7. Crowdfunding Isn’t Magic Money (or is it..?)
One of the drawbacks of Indiegogo and crowdfunding in general is that you must put in work to thoroughly prepare for a campaign launch.
This is what I’ve been teaching for the last several years – a step-by-step strategy for getting funding, no matter which platform you decide on.
This includes things:
- Writing press releases
- Building an email list
- Getting social followers
- Hiring promotion companies, and more.
When you follow this strategy, yes, it can seem like you just got access to magic money. However, if you’re trying to do it all yourself and you’re a beginner, then you’re in for a rude awakening.
Most entrepreneurs and creative types will get frustrated when they don’t see their campaign raising funds. Then, they start to panic.
The only time that you’re going to get instant money is when you take on a loan, like using Kiva – a no-interest loan site, or one of these guys who specialize in giving loans to entrepreneurs.
Otherwise, it’s going to take some work in order to tell your story, tease your project, and get people excited about funding your work.
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