You have an idea and you want people to back it. Where do you go if you can’t receive immediate cash from the investor community, or your family and friends? There’s a plethora of crowdfunding sites and some of the popular destinations are Indiegogo, Crowdfunder, Lending Club, RocketHub, Fundable and Kickstarter. Most of these take a percentage the dollar amount raised – usually around 5% if you meet your goal and 8% if you don’t – plus charge a payment processing fee. Crowdfunding is a competitive business.
During the Startupfest in Montreal, Danae Ringelmann, one of the three founders of Indiegogo, stated that “the thing that matters the most in setting yourself up for success in starting a company is your why. It’s why you’re doing what you’re doing is more important that what your doing. It’s the why that matters, not the what.”
The company launched in January 2008 and desired to democratize the fundraising experience for filmmakers. At the time it was tough for independent artists to raise money they needed to produce their films. Angel investors and banks wouldn’t simply hand over money and take a risk. As soon as the site when live the financial market crashed, but they carried on. “Entrepreneurship is freekin’ hard,” said Ringelmann. “If you’re not completely irrationally obsessed with fixing a problem, you’re going to quit. Because there’s too many unknowns.”
Fast forward to 2011, they expanded past film and into many categories and raised a $1.5 million in seed funding. Most would have quit, but the partners soldiered through because they “were passionate about what they were doing despite reason.”
“For those of you who don’t have ideas, stop looking and start noticing,” noted Ringelmann. She built Indiegogo out of the frustration to raise money for great ideas. “For those of you who do have ideas I challenge you to make sure that you’re heart and your mind are aligned and that you’re doing it for the right reason.” She declared that a great way to make sure you have alignment is to do the 5 whys exercise – basically keep asking yourself why over and over again until you logically find your answer. “Then you know you’ve articulated the root of why you’re doing what you’re doing.”
From a Canadian perspective, Indiegogo has funded many successful projects. Most notedly was the Karen Huff (The bus monitor) fundraiser and Whirlscape’s Minuum Keyboard Project.