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BizReport : Ecommerce archives : September 08, 2010

Is crowd-funding the answer for entrepreneurs?

New businesses, it seems, are forever looking for increased funding, customers and buzz. A new crowd-funding platform may help with all three areas. Called IndieGoGo, the platform helps put entrepreneurs in touch with funding sources, which increases their buzz and brings customers to the business.

by Kristina Knight

indiegogo.pngThe ">IndieGoGo platform was originally launched to help filmmakers, but has grown to encompass nearly every venture imaginable. From bakeries to game developers, the platform puts entrepreneurs in touch with funding. It could also be another way for established businesses to partner with causes to increase consumer interest and traffic. There are currently more than 7,000 projects in 134 countries. Co-Founder Slava Rubin introduces us to the platform.

Kristina: "What does a platform such as IndieGoGo offer new businesses?"

Slava: "IndieGoGo provides the online tools that allow anyone with an idea to immediately set up a project, set fund-raising goals, share and promote it. Using IndieGoGo can help raise initial capital for an idea, and it is also great way to determine the viability of an idea in terms of seeing what potential customers want and how excited the public is about project."

Kristina: "Who are the funders on the site? Are they individuals, foundations, other businesses?"
Slava: "Funders are typically individuals, including the project owner's network, or fans and online supporters. Anyone can donate to a project and IndieGoGo makes donating easy for funders by offering several options for payment. Another element of contributing on IndieGoGo is that funders are offered perks, or incentives, to donate at varying levels. For example, the project owner could create perks that are directly tied to their new business idea, such as, for every $30 contribution you receive a bottle of domestic wine at our 'soon to open' wine store, for every $60 contribution you receive a 30 minute wine tasting class, and so on."

Kristina: "What are the benefits of using a platform such as IndieGoGo?"

Slava: "For businesses, IndieGoGo provides an opportunity to raise funds early in the process, and mitigates the dependency on finding investors. It also provides a turnkey tool for collecting contributions, promoting the project, and capturing important audience information. IndieGoGo provides the place to go, tools to fund, and architecture to build a compelling story and share it with everyone."

Kristina: "There has been a lot of talk this year about brands/businesses partnering with charitable causes through support of their that one way that brands and businesses should look at the platform?"

Slava: "It certainly can be. In general, crowdfunding generates success when there is a compelling story behind the 'project.' This may be a stand-alone business idea, or it may be through partnerships. On the broadest level, IndieGoGo has no restrictions and anyone can use the platform to raise funds. Organizations and businesses can use IndieGoGo to raise money for charitable causes or events of their choice. If a business partners with a cause to raise funds on IndieGoGo, we have great tools to help them promote, collect and engage with their current donors and get new ones."

Businesses or causes who utilize the IndieGoGo platform pay a small percentage-based fee, but otherwise keep all of the profits from the project. The platform tracks who has contributed, at what amount and which perks have been used the most so that the business can stay on top of the campaign from beginning to end.

Tags: crowdfunding, entrepreneurs, fundraising, IndieGoGo, Slava Rubin, venture investing

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  • Great interview! I think that companies like indieGogo are leading the way to what one day will be a main stream funding and investment option.

    Cameron Chell

  • IndieGoGo does support international projects - that's one of the reasons I chose to use this site over other ones for my project. Also, I really like the fact that they offer positive incentives - you keep the funds you raise whether or not you meet your goal. But if you do meet your goal, you get a 5% bonus. That works for me!

  • Erica

    Greg - thanks for pointing out the new EU platform. Just a note, though, that from my experience IndieGoGo has a great EU presence, - especially in the UK. I have seen some pretty amazing European projects get funded recently.

  • IndieGogo is a great platform, but still geared to the US market. For EU based creators, have a look WWW.SPONSUME.COM . Unlike Indiegogo, Sponsume do not charge project creators at the moment!



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