Crowdfunding: what it is and what it may become

Exclusively written for the Sting by Danae Ringelmann, Co-Founder and CFA at Indiegogo

Danae_Ringelmann_Indiegogo

Danae Ringelmann is the Co-Founder and CFA at Indiegogo

Growing up I watched my parents struggle time and time again to get loans for their small business. I had a very similar experience while I was trying to raise money for a theatre production – even though all of the potential investors we invited praised the project, they all decided not to fund it. During my time working in the finance industry, I realized that it wasn’t necessarily hardworking people with great ideas who received financing. When I was in business school, I had the pleasure to meet Eric Schell and Slava Rubin, who had experienced similar frustrations when trying to raise money for their own projects. We were tired of seeing brilliant ideas going unborn every day, not because entrepreneurs weren’t doing their jobs well or because there wasn’t interest for their projects, but because a select few gatekeepers were deciding who did and didn’t get access to financing.  We created Indiegogo as a place where every idea gets a shot at success. Ironically, we faced our fair share of setbacks trying to get our platform funded too. We were turned down by 92 investors before got our first round of traditional funding in March of 2011.

Crowdfunding has quickly become a permanent part of the finance ecosystem. An increasing number of people are welcoming crowdfunding as an either an alternative or complement to traditional funding. Indiegogo in particular has removed bias from the funding equation. It’s a completely open platform where crowd decides which ideas deserve to become a reality – if they like and believe in a project they will fund it, regardless of the gender, ethnicity or religion of the entrepreneur behind it.  With perk-based crowdfunding, anyone who likes an idea gets to participate in its success and be rewarded for participating. It creates an amazing community where people work together to bring ideas to life.

For entrepreneurs and creators the benefits of crowdfunding are more than just financial. The campaign process provides invaluable information as your project evolves.

Market validation – You can not only determine whether there is a market for your product, but you can find out your target customers’ preferences and see if they have any ideas on how to improve your product as you go into production.

Connect with new and existing audiences – As you run your campaign and interact with contributors you’ll build a community that is excited about what you’re creating and will spread that excitement during and after the campaign.  The campaign itself is a media event that you can use to build buzz about your project and reach people outside of your network.

Funding – Perhaps this is obvious, but a well-executed campaign will get the capital you need to bring your idea to life.

Partnerships – Because we want to support entrepreneurs throughout the project lifecycle, we have teamed up with companies like Arrow Electronics, Brookstone, and Celery to help entrepreneurs bring their products to market.

Even beyond the campaign itself, crowdfunding helps entrepreneurs receive additional financing by giving investors and venture capitalists a place to look for new investment opportunities, and proof that a market exists for those innovations. It takes some of the risk out of the venture financing process.

I believe that the future of crowdfunding platforms is to grow beyond simply being a way for people to fund amazing projects, but to provide support system for projects to go from research, design, funding and creation, right through to the marketplace. Indiegogo is pioneering this approach already. We started by partnering with Brookstone, the innovative product developer and specialty retailer to help bring the most ground-breaking crowdfunded products to market quicker than ever before. We’re now working with Arrow Electronics to our entrepreneurs access to industry-leading toolsets, engineers, discounted components and manufacturing, design and supply chain logistics – a package that is worth up to $500,000.

Crowdfunding has already grown tremendously since its origins as a financing alternative for entrepreneurs. But our mission has always been to help entrepreneurs bring ideas to life, and each partnership and improvement to the platform is only making it easier for dreams to become reality.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Teachers launch a free ebook to help children cope with the pandemic

Faith can overcome religious nationalism. Here’s how

Climate change and health – can medical students be the solution?

To feed 10 billion people, we must preserve biodiversity. Here’s how

Commission launches open access publishing platform for scientific papers

The world’s fatigue from COVID-19

Why women aren’t allowed to work

UN chief underscores value of cooperation with Southeast Asian countries

“One Belt One Road”: Its relevance to the European Companies

Coronavirus: Commission Statement on consulting Member States on proposal to further expand State aid Temporary Framework to recapitalisation measures

Peru is building a new international airport near Machu Picchu – and archaeologists are worried

European Energy Union: Integration of markets and need for in-house energy production

New York City has a plan to fight fast fashion waste. Here’s how it works

MWC 2016 LIVE: Xiaomi looks to revive growth with flagships

Another doomed EU attempt to interfere in Libya?

The ECB must extend its money stimulus beyond 2018: Draghi reckoning

How to provide health education and thus create better health systems

UN chief appeals for calm as Mali presidential election draws to a close

What the EU is doing to foster human-centric AI

Women’s Rights: Another Challenge for Medical Students

A machine din

Egypt is building one of the world’s largest solar parks

OK computer: why the machine age still needs humans

G20 LIVE: The European Sting covers online world news and the latest developments at G20 from Antalya Turkey

Why people with disabilities are your company’s untapped resource

Monday’s Daily Brief: US-DPRK relationship reset, ‘Horrific’ Kabul bombing, Anti-conscription plan in Syria, Climate change heat stress, Security Council in Iraq

3 reasons why embracing the circular economy can be powerful for middle income countries

How microfinance develops decent work

Reforms in a few countries drive a decline in average OECD labour taxes

‘Compelling case’ for urgency around global disarmament, UN-led forum told

Are Halloween pumpkins a problem for the planet?

Ukraine: EU allocates €25.4 million in humanitarian aid

Flexible jobs can make work-life balance worse, a German study finds

EP’s MFF negotiators disappointed by failure of EU budget summit

When is necessary understand the cultural marks in health-disease process

Somalia advancing towards ‘inclusive and peaceful future’ for women, deputy UN chief

South Sudan: €48.5 million in additional EU humanitarian aid

Brexit uncertainty keeps shaking the world’s financial markets

This is the most sustainable way to use fashion – and it’s not renting clothes

Strengthening European unity is in all our interests, says Luxembourg PM Bettel

EU external action budget: European Commission welcomes the final adoption of the EU’s new long-term external action budget for 2021-2027

How women are transforming the Arab world’s start-up scene

How fintech is making investment accessible

Rapid growth in China post-COVID makes it ripe for investment

What we need for a better European Solidarity Corps

New SDG Advocates sign up for ‘peace, prosperity, people’ and planet, on the road to 2030

Can one FTA and 110 lobby meetings make the dirty oil clean in Europe?

Millions at risk if Syria’s war moves to last redoubt of Idlib, warns senior aid official

Parliament wants to suspend EU accession negotiations with Turkey

Why strive for Industry 4.0

MEPs approve new, more inclusive Erasmus+ programme

Have we reached peak smartphone?

These 2 teenagers have helped change the law on plastic pollution in Indonesia

Jordan flash flooding: UN chief ‘saddened’ by loss of life

Macao: EU reports on political and economic developments in 2020

Sudan Partnership Conference: EU mobilises more support for Sudan’s transition

Thousands of Syrians in ‘life and death’ struggle amid harsh conditions in remote desert camp, UN warns

Portuguese Presidency outlines priorities to EP committees

This research can help organizations plan for different COVID-19 scenarios

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s