When you think of crowdfunding platforms, Indiegogo is usually one of the first two names that comes to mind [Kickstarter might be a little more popular]. With hundreds of crowdfunding sites available right now, it is important to weigh the pros and cons of Indiegogo before taking your campaign live. Here is a brief look at what we feel are the most important topics that you’ll want to think about today.
The Pros of Indiegogo
1. You don’t have to be fully funded to receive your cash.
Unlike Kickstarter and other crowdfunding platforms, Indiegogo offers you the option to receive all funds from a campaign instead of going with the all-in or nothing structure. The fees are higher if you choose to receive cash even if you’re not fully funded, but at least you’ll know that you can receive something for your hard work.
2. You have more time to meet your fundraising goals.
Indiegogo allows a campaign to stay live for up to 120 days. This gives you more time to begin marketing your campaign to your targeted demographics, especially if you haven’t done any pre-campaign work to increase your exposure. Because many contributors will donate at the beginning or the end of a campaign, this can also work to a disadvantage if you’re not careful. Be sure to use this flexibility in a way that gives you the most advantages.
3. Indiegogo offers a charitable crowdfunding platform.
On the platform called Generosity, Indiegogo allows people to run fundraisers for personal causes. Charitable crowdfunding efforts are also available. The fees charged to these campaigns are reduced compared to the standard platform so that every campaign is able to keep more of the money that is donated for the cause.
4. There is automated promotion through social integrations.
Indiegogo offers each campaign a powerful set of promotional tools that can be specifically tailored to meet specific needs. This includes automatic promotion to your preferred social platforms so that your message can easily reach those who want to hear it. You tell your story and this crowdfunding platform will help you to share it to the world.
The Cons of Indiegogo
1. It doesn’t have the strongest brand exposure.
When looking at the overall traffic levels of Indiegogo compared to Kickstarter, it is Kickstarter that is usually about 4x more popular. That doesn’t mean you won’t benefit from having a campaign go live, but it does mean that you’ll have to work a little harder to get the exposure your targeted demographics are going to need to become interested in what you’re offering.
2. It can place you in a financially compromised position.
Let’s say you’re offering rewards to people who contribute. If you don’t receive full funding on your campaign, then you’re still contracted to provide those rewards, but without the budgetary infrastructure that you were expecting to have. This can put you and your business into a weak financial position because you still have to pay for your internal infrastructure costs to get the rewards out to people.
3. You might need a business license.
You’ll find many artists, freelancers, writers, and other creatives on Indiegogo trying to get their next venture funded. The only problem with this is that some states in the US would require you to have a business license in place for you to receive those funds. Alaska and Washington State are the two most restrictive states in this area. Check you local laws before taking a campaign live to make sure you’re not going to be stuck with an unpleasant taxation surprise if you do get your funds.
4. Fees can be as high as 9%.
If you don’t meet your fundraising goals, but choose to take the cash that was donated to your cause, Indiegogo will charge you a 9% fee on the total amount raised. That doesn’t seem like much until you realize that’s $900 out of every $10,000 that you raise. In comparison, Kickstarter charges a flat 5% only on successful campaigns. Because of this, it is important to make sure that the fee structure is incorporated into the final amount you’d like to raise on this crowdfunding platform.
Many people have found crowdfunding success on Indiegogo. With the addition of Generosity, even more people are able to meet their financial obligations when the unexpected happens to them. It might not be the most popular of the crowdfunding platforms today, but the pros and cons of Indiegogo do show that it is worth giving the site a second look.