Indiegogo and Kickstarter are two of the largest rewards-based crowdfunding platforms out there. They allow eligible creators to raise money for projects in a wide variety of categories. In return for a donation or pledge, backers gain access to cool rewards and experiences.
Since I started writing about crowdfunding in 2012, these two sites have seen some major changes. Fundamentally, these two sites are different from each other in a few important ways, and knowing why can help you choose which one will be best for your project.
Kickstarter
Kickstarter has seen a huge amount of growth in the recent years. At the time of writing, campaigns have raised 2.6 billion using their platform. With more than 11 million backers and 3.7 million repeat backers, Kickstarter is the biggest platform in the rewards-based crowdfunding space. Over 114,000 successful projects have launched on their website.
Types of Campaigns Allowed
Kickstarter is different than its competitor Indiegogo in that you can only launch an all or nothing crowdfunding campaign on the website. This means that you must hit your fundraising goal before the end of your fundraising duration. Otherwise, you won’t receive any of the funds and your backer’s credit cards won’t be charged.
For example, let’s say you launch a campaign on Kickstarter with a fundraising goal of $100,000 and a campaign duration of 30 days. At the end of those 30 days, if you’ve only raised $90,000, you won’t be able to keep those funds and none of the backers who pledged money will have their credit card charged. All of the money will be returned to the backers.
Kickstarter places projects into the following categories: Art, comics, crafts, dance, design, fashion, film & video, food, games, journalism, music, photography, publishing, technology, and theater. Your project must fit into one of these categories.
Platform Rules and Regulations
In the past, Kickstarter has been a bit more curated and selective than their competitor, Indiegogo. They have more requirements and restrictions that you must take heed of before you hit that launch button.
Kickstarter is open to international backers, but you can only start a project from certain countries. As this list is always growing, I’d recommend looking at the Kickstarter FAQ before you decide to use the platform. At the time of writing, Kickstarter is open to creators in the: US, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong, and Singapore.
You must have an address, bank account, and government-issued ID based in the country that you’re creating the project in. In other words, you must be a permanent resident of one of these countries. You can also create a project on behalf of a legal entity, like an LLC or corporation. Like Indiegogo, you must be 18 years or older to create a project, unless you have a parent or teacher who is running the campaign with you.
Aside from the nitty gritty restrictions, you must also abide by a few key regulations. First of all, your project must result in an end product that can be shared with others. Usually, creators will offer this end product as a “perk” or “reward” that backers can gain access to when they pledge money. While that end product could even be an experience or event, there should be something that “happens” or “comes into the world” as a result of raising money.
Second, you can’t raise money for charity on Kickstarter. This includes raising money for established nonprofit organizations or raising money to fund expenses related to your life, like education costs or medical bills. You can raise money that goes towards a project that your nonprofit is working on, like a book, but you can’t just donate the funds to the nonprofit outright.
Thankfully, if you are looking to raise money for charity or to finance personal expenditures like a trip around the world, I’ve put together an Amazon ebook on this topic, entitled “Crowdfunding Personal Expenses: Get Funding for Education, Travel, Volunteering, Emergencies, Bills, and more!”
Also, if you want to raise money for your nonprofit organization, I’ve also written an Amaon ebook on this topic! You can find it by searching Amazon for the title, “NonProfit Crowdfunding Explained: Online Fundraising Hacks to Raise More for Your NonProfit.”
Along with avoiding charity fundraisers, you must also avoid offering any form of financial incentives and any prohibited items. Kickstarter has a long list of prohibited items.
Some of them include: Rewards that the creator did not make, any item claiming to cure, treat, or prevent an illness or condition, contests/coupons/gambling/raffles, energy food and drinks, offensive material, offering a genetically modified organism as a reward, offering alcohol as a reward, offering financial/money-processing/credit services, offering financial intermediaries/cash-equivalent instruments, offering travel services, phone services, business marketing services, political fundraising, drugs, nicotine, tobacco, vaporizers, weapons or replicas of weapons, and pornographic material.
Notably, you also can’t offer rewards of that things that already exist, or repackage a previously-created product without adding anything new or without aiming to iterate on the idea in any way.
Fees That You Should Expect
If you successfully hit or surpass your goal Kickstarter, you’ll be charged a 5% fee at the end of the campaign. In addition, you will pay a payment processing fee of 3% + $0.20 per pledge. If you have any pledges under $10, they’ll be assessed a 5% fee + $0.05 per pledge.
Kickstarter’s Algorithm
Kickstarter’s platform algorithm is one reason why regular backers discover crowdfunding campaigns on the website. The algorithm will show projects that are recommended for you, those that are popular, those that Facebook friends are following, and more. On Kickstarter, there are a variety of searching options. You can search by:
- “Projects We Love”
- Recommended For You
- Saved Projects
- Trending Projects
- Nearly Funded Campaigns
- Just Launched Campaigns
- Backed By Friends
- Category
- Tags
You can then sort your search with a few different algorithms including:
- Magic Sort
- Popularity
- Newest
- End Date
- Most Funded
- Most Backed
As you can see, there are a lot of ways for Kickstarter backers to discover new projects. There are even advanced search features that will allow backers to find projects based on location! The two items that I’d like to hone in on are “Projects We Love” and “Magic Sort.”
Kickstarter has always been more of a curated crowdfunding platform than Indiegogo. In fact, they used to highlight projects that were “Staff Picks.” They’ve replaced the staff pick category with a category named “Projects We Love.”
The Kickstarter website states that, “Projects We Love is an evolution of Staff Picks, a feature we used in the past to connect creators and backers around best-in-class projects. The difference is that Projects We Love automatically get a nice little badge, so that everyone can tell when we’re extra excited about a project. Projects We Love are featured by a team that works to surface extra-bright projects. They’re not paid endorsements, and like any other project, they retain complete creative independence. Most simply, a Project We Love badge is a show of respect and enthusiasm from us at Kickstarter.”
Personally, I think one of the reasons they changed this is because Kickstarter creators were simply putting the “Kickstarter staff pick” badge on their project, even if they weren’t chosen by the website’s staff. Haha, I actually wrote a long blog post about how to become a staff pick a while back, which some of my readers may have abused. Hopefully not!
The reason that you want to become a part of this new category is twofold. First, Kickstarter sends out a newsletter every week featuring three campaigns in the Projects We Love category. There are also other newsletters that Kickstarter puts out, as you can see below.
Second, whether or not you’re in this category will factor in to how your project is sorted in the Magic Algorithm, which I’ll go over briefly next. I’ll also be talking about how to get featured in the Projects We Love category in a later chapter.
For those of you who don’t know, the Magic Sort is different from the popularity sort algorithm in that it “shows you what’s bubbling up right now across categories and subcategories.” The website goes on to say that the algorithm displays a “rotating cross section of compelling projects on Kickstarter by surfacing a mixture of Projects We Love and what’s popular from each of our 15 categories.” In my experience, because the Magic Sort tends to update more frequently than other algorithms, you have a higher chance of being featured here early on than through other algorithms.
As you can see, while Kickstarter does showcase projects that are popular as measured by objective metrics, they also still have the curated aspect of the platform, where they highlight projects that they themselves like! This is one big difference between Kickstarter and Indiegogo. Yes, Indiegogo does now have the “Indiegogo Team Favorites” section, but quite simply, different groups of people prefer different types of projects.
Kickstarter’s Spotlight
Kickstarter’s spotlight feature helps creators continue to share their product’s story with backers and members of the press after they’ve successfully completed their campaign. It also allows creators to create a call-to-action button and send traffic that comes to their campaign page to a website of their choice. You can customize the color, text, and URL of the button. When potential customers click that button, they’ll be taken to a webpage, online store, or other location so that they can continue to pledge money to your campaign.
Next, I’ll be discussing some of the features of the Indiegogo crowdfunding platform. These are key attributes that you should be aware of before you decide to launch your crowdfunding campaign.
Indiegogo
Historically, Indiegogo has been more of an open platform than Kickstarter, accepting a wide array of different projects and campaigns. At the time of writing, $950 million has been raised on Indiegogo, across all projects and across 223 countries. Over 11 million backers have donated to over 650,000 projects. In fact, on the day I wrote this very sentence, “7,261 contributors raised $851,210 for 1,600 campaigns.” On the surface, they might look similar to Kickstarter, but underneath, they are quite different.
Types of Campaigns Allowed
Indiegogo offers two funding options for your crowdfunding campaigns, fixed and flexible. A fixed funding campaign is also known as an “all or nothing” crowdfunding campaign. When raising money for an all or nothing crowdfunding campaign, you will only receive the pledges that you have accumulated throughout the duration of the campaign if you meet your fundraising goal. This means you absolutely must hit your goal before the clock winds down.
For example, if you have a fundraising goal of $10,000 and have only raised $9,000 by the end of your 30-day campaign, you will not receive any funds and your backers will not have their credit cards charged.
When raising money for a flexible funding campaign, you will receive the pledges that you have accumulated throughout the duration of the campaign, even if you do not meet your fundraising goal.
For example, if you raise $4,000 in 30 days with a $5,000 goal, you would still be allowed to keep the $4,000 and your backers’ credit cards would be charged.
They place projects into the following categories: Animals, Art, Comic, Community, Dance, Design, Education, Environment, Fashion, Film, Food, Gaming, Health, Music, Photography, Politics, Religion, Small Business, Sports, Technology, Theatre, Transmedia, Video/Web, and Writing.
Platform Rules and Regulations
Indiegogo is much less strict than Kickstarter in terms of what you can raise money for, but there are still some restrictions. First, you can’t raise funds for projects that forward illegal activities, cause harm to people or property, or for a project that scams others. Second, you can’t offer certain perks, including: financial securities or incentives, profit sharing, alcohol, drugs or drug paraphernalia, weapons or accessories, lottery or gambling perks, air transportation, human remains, and any perks forwarding hate, discrimination, personal injury, death, damage, or destruction to property
Overall, you are legally bound to fulfill any promises that you make on the platform to your backers, so don’t launch a campaign lightly! Also, you can only raise funds if you are over the age of 18. If you’re between the ages of 13 and 17, you can use the service with consent and supervision of your parent or legal guardian.
Fees That You Should Expect
Indiegogo charges a 5% fee on all money raised on the platform. For “all or nothing” campaigns, they will only charge you a fee if you hit or surpass your fundraising goal. In addition to this fee, you should expect to pay a payment processing fee.
PayPal charges a 3-5% fee. Funds raised through credit card are assessed a 3% fee + $0.30 per transaction. If you’re located outside of the USA, you’ll also experience a $25 wire fee.
The GoGoFactor Algorithm
Gogogofactor refers to the algorithm that Indiegogo uses to determine “Search rankings, placement on the site, featured spots in our newsletter or blog, and inclusion in our press outreach.”
The algorithm is merit-based, meaning that you, as a creator, have the ability to control whether or not you optimize your crowdfunding campaign and improve its page rank on the website. Before I get into how to optimize for this algorithm, I’ve further expanded on what “gogofactor” is in this blog post.
Key Takeaways: Indiegogo wants you to use their software and tools to keep people coming back to their website, which in turn will help you raise more funds and grow their revenue. You can optimize your campaign to make GoGoFactor work to your advantage!
InDemand
InDemand is a newer program that allows creators to continue to raise money, even after their funding duration has expired. I’ve had creators on my podcast who have used and enjoyed InDemand and I’ve really come to like the idea behind the service.
Running a successful ecommerce store is the next step for many creators after hitting their crowdfunding goal. InDemand is one step in that direction and makes it easier to accept payments, get data about your audience, and to continue to build up a following.
There are a few key reasons to consider using Indiegogo’s InDemand functionality and opting into the program before or after you’ve raised money on their platform. I’ve outlined those reasons in this blog post.
You Can Include A Secret Perk
What’s an Indiegogo secret perk? Basically, it’s a way to reward loyal supporters! You can provide a unique link that will unlock a “secret perk” which they can choose when they back your campaign.
Not only can you use a secret perk to thank your hardcore followers, but you can also use it when courting bloggers, influencers, and online communities to get them interested in your Indiegogo campaign.
No one wants to feel like they are being marketed to. The goal is to make your followers feel unique, special, and valued. The secret perk is one way to accomplish this.
Which Platform Should You Choose?
Ultimately, this answer comes down to the needs of your business or creative endeavor. As you can see, each platform has different functionality. On average, Kickstarter does have a larger community and the site gets more traffic than Indiegogo.
However, I’ve had many creators who have talked about how the Indiegogo team reached out to them and that they appreciated that personal touch. I’ve even talked with some creators who launched a campaign on Kickstarter and then transitioned it to the Indiegogo InDemand once they had successfully raised funds.
