Crowdfunding is a process of fund donation, mostly carried out online, to raise money for a particular venture. The venture is more of a common service or noble cause. There are many sites that promote this concept, but Indiegogo and Kickstarter are undoubtedly two of the largest and most popular sites on the Internet. Both the sites are famous for collecting extensive monetary contributions and using the same for medical emergencies, public service celebrations, etc. While they are both important in their own way, there has been a debate about the better one among the two. The subsequent paragraphs, therefore, throw light on the differences between them.
- Indiegogo is one of the first crowdfunding sites.
- It was founded in the year 2008 by Slava Rubin, Eric Schell, and Danae Ringelmann, and is headquartered in San Francisco, California.
- It accepts a broad spectrum of ideas for fundraising from its customers.
- Customers/donors who donate funds for the projects are entitled to receive gifts instead of a stake in the company.
- This site can be legally used only if a person is over 18 years of age. If you are between 13 to 17, you need a guardian to help you navigate this site.
- Kickstarter is a huge, global crowdfunding site.
- It was founded in the year 2009 by Charles Adler, Perry Chen, and Yancey Strickler, and has its headquarters in New York City.
- It is particular about the type of ideas and works chosen to raise funds.
- Just like its counterpart, Kickstarter offers rewards and experiences for its fund donors.
- It has certain guidelines regarding the projects funded; like, restricting rewards to a chosen set of items or the requirement of a manufacturing plan, etc.
◼ It was launched with an aim to help anyone who has ideas for raising funds to achieve their goal. It is available in English, German, Spanish, and French.
◼ It was launched with an aim to improve and help creative projects. It is functional inside the US as well as outside, though it is slightly harder launching a project outside the country.
◼ It accepts all kinds of projects; there is no restriction. It is very flexible in accepting and launching a variety of ideas.
◼ It funds solely creative projects - stage shows, comics, journalism, films, music, videos, etc.
◼ Some of its successful campaigns include:
- Stick-N-Find (also StickNFind)
- Let's Build a Goddamn Tesla Museum
◼ Some of its successful campaigns include:
- Pono Music
- Reading Rainbow
- Project Eternity
◼ It charges a 4% fee for projects that were successfully funded and a 9% fee for projects that could not meet the deadline.
◼ It charges a 5% fee for projects that were successfully funded; however, if you fail to meet your goal even by a few dollars, you end up with nothing.
◼ It does not follow the 'all or nothing model', which is beneficial at times, though this strategy prevents the emergency of trying to fund projects.
◼ It exclusively follows the 'all or nothing' model' to maintain security; i.e., if you do not reach your deadline, you get no funds.
◼ Reportedly, it has a success rate of around 10%. However, its flexibility in funding projects has resulted in over 92,000 campaigns.
◼ It enjoys a comparatively high success rate - about 43%. However, the number of campaigns are lesser, a little over 46,000.
◼ It has lesser number of users and moderate traffic, possibly due to the funding strategies.
◼ In comparison, Kickstarter has a wide number of users and sufficient traffic.
◼ The benefits of Indiegogo include easy global accessibility, special algorithms, and better website features.
◼ The benefits of Kickstarter are that it is highly trustworthy and has a loyal user following (according to sources). Its already-established name helps in funding small to massive projects.
◼ One of the main Indiegogo disadvantages is the less loyal fan following. Thus, it has to spend more for advertising and distributors. Also, the 'gogo factor' algorithm requires time and experience to understand and increase the campaign score.
◼ They have very strict and rigid guidelines, and lack flexibility. The campaign itself requires a lot of time to get live and be promoted.
- It would be unfair and unethical to compare the two entities. Each site, in its own way, has sufficient projects and loyal users to vouch for its goodwill.
- It is to be noted that even though the two of them aim at crowdfunding, they follow different strategies to achieve the same; thus, they are not literally on the same platform to be compared.
- The current statistics speak for themselves; however, circumstances do have a way of changing. Moreover, the sites have become more of rigid, full-fledged entrepreneurial ventures now, with each one challenging the other by launching newer programs.
- Whichever site is leading in terms of campaigns and users today may fall back tomorrow, while the other site may race ahead.
- Besides, do not forget that there are other crowdfunding sites too (even though these two are the giants of this industry), which may work harder to improve their techniques and strategies as well. It is a tough market out there.
- As of now, it can be simply and obviously stated that Kickstarter is excellent for contributions regarding creative ventures; you can go for it if you are specific about the project, while Indiegogo accepts a variety of ideas; therefore, you can be more flexible regarding the choices.