Thanks to the JOBS Act, ordinary people will be able to invest in start-ups. Slava Rubin, co-founder of Indiegogo, a crowdfunding website, explains exactly what you can do about that.
00:07 Slava Rubin: Since launching in January 2008, we now have thousands of active campaigns every month and are distributing millions of dollars, including many for-profit businesses that use Indiegogo. There's Emmy's Organics, turned down by their bank in upstate New York. They go onto Indiegogo and they raise the money they need to expand their production for their gluten-free dessert company. So after two years of revenue, they're turned down by the bank, but today because of Indiegogo supporters and funding, they're now selling their products in 40 states.
00:37 Rubin: There's really a lot of different examples, but you need to have a good pitch, you need to be proactive and find an audience that cares. So you need to get, you typically need 20-40 percent of the funding to come first from your own network, your friends, your family, your inner circle. Then you want to get out to a bunch of strangers. So on average on Indiegogo your getting 20 percent of your funding from total strangers. And the way you get more from strangers is having a higher go-go factor. So a go-go factor is our Google page rank like algorithm. So kind of like the SEO of crowd funding, which we created which is our own algorithm which helps any campaign have an equal opportunity to get promotion to our millions of page views and out to the different media.
01:16 Rubin: We know that to have a video as part of your campaign, you raise 114 percent more money than if you don't have a video. We know that you want to set a realistic deadline, typically, your deadline, on day 36, your target on day 36 of a 47 day campaign. You want to keep your campaign fresh with updates. So if you have an update every five days or less you will raise four times more money than if you have an update 20 days or more. We know that e-mail is your number one tool in raising the most money, Facebook is number two, and Twitter is number three. You want to have great perks. So over 90 percent of the campaigns on Indiegogo will offer perks in return, clearly if we're talking equity crowd funding, the perk can be the equity.
01:59 Rubin: With crowd funding, you get a lot of benefits besides the money. Really, I'd say there's five benefits. Number one is you get to gauge demand and mitigate any risks. Number two is you get to test your marketing. Number three is you get to get extra promotion from all the extra social media and platform promotion. Number four is you get the actual customer data, which is very valuable. And number five is it's great to get money.
Last updated: Apr 25, 2012
NICOLE CARTER is Inc.'s San Francisco Bureau Chief. She was previously a reporter and an editor at the New York Daily News, and her work has also appeared in Consumer Reports magazine. @nicoleckinc