Why You Won't Use the Word Crowdfunding for Long
In the mid-2000s, when Slava Rubin, Eric Schell, and Danae Ringelmann's frustration with trying to raise funding led them to found the website Indiegogo, the most significant trend in venture-funded startups was social networking. And the public was catching on. Remember that, back when it was necessary to refer to what you were doing logging on to Facebook after Friendster and Myspace had grown respectively dusty and troll-ridden?
"Fast-forward 10 years, social networking is not a phrase that's even used much anymore, because it's been layered into the fabric of communication," says Rubin, the Indiegogo co-founder who's now CEO of the crowdfunding site.
He's banking that crowdfunding--the big concept of raising little bits of money online from large groups of people--a concept his site helped pioneer, will soon reach the sort of ubiquity as has social networking. He believes that in another 10 years, the concept of social, decentralized fundraising will be so common that "people will not even use the word crowdfunding anymore."
Rubin, 34, is uniquely positioned to usher in the global omnipresence of crowdfunding. He's at the helm of the crowdfunding site that's second only to Kickstarter in popularity. And Indiegogo, fueled by the largest round of venture capital funding yet for a crowdfunding site, is entering a period of fast growth that will help it differentiate itself from its main competition. What Indiegogo builds with that funding can be expected to have a significant effect on the development of the crowdfunding industry--and perhaps on how startups, artists, investors, and, well, everyone, thinks about raising funding.
The $40 million round, which closed late last month, brings on a roster of heavyweight investors known for funding and advising companies that not only grow quickly but that also sustain themselves for more than a few quick years. Institutional Venture Partners, which invested in Netflix and Dropbox, and Kleiner Perkins's John Doerr, whose track record includes Google and Amazon, are both now significant Indiegogo investors. Doerr is joining as an adviser.
"We wanted people who'd play 'long ball,' as I say, which is not being shortsighted about results or thinking, 'Are we going to IPO next year?' but rather asking, 'Can we create a sustainable company that's going to be around 100 years from now?'" says Rubin.
It's already been a banner year for Indiegogo. Two films funded on the platform, Dear White People and Life Itself, were hits at the Sundance Film Festival. And the company won headlines for helping send the Jamaican bobsled team to the Winter Olympics.
The company doesn't disclose revenue figures, but it does claim to be the "world's largest crowdfunding platform" and boasts 1,000 percent growth in funding totals over the past two years. Based in San Francisco, the company has 85 employees and differs from other crowdfunding sites in that it allows anyone to attempt to fundraise for anything.
For this openness of platform, it has been dubbed the "Android of crowdfunding." Rubin explains that unlike other crowdfunding platforms, Indiegogo doesn't rely on humans to make decisions to approve projects or curate them on its site. He likens it to the way anyone can upload a video to YouTube or a link to Twitter.
"We are proud of putting the 'crowd' in crowdfunding, rather than just being another gatekeeper," Rubin says.
Despite the company's long-ball strategy, it isn't immune to jumping on trends. The site is exploring how it might incorporate equity-based crowdfunding as the U.S. Securities and Exchange Commission creates additional rules this summer. And Indiegogo is using its new cash infusion to beef up its team and expand into additional languages and currencies--including, potentially, bitcoins.
"Whether that's the Indian rupee or the bitcoin, we're trying to evaluate what currency to add next," Rubin says. "And whether it's adding China next or Belgium or the moon, we will always be evaluating what's the new geography to localize. So I think there's a lot of work to be done in years to come."
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.