In 2008, a 29-year-old Danae Ringelmann--along with Slava Rubin and Eric Schell--launched Indiegogo, with the goal of democratizing funding for businesses and creative projects. Or at least, that's how they had to describe it, because the term crowdfunding was barely known.
Today, nearly a decade after Indiegogo's launch, its founders are no longer "the lone, crazy people thinking you could use the internet to raise money" for projects and businesses, as Ringelmann puts it. They have lots of company, including Crowdfunder, CircleUp, and, of course, Kickstarter. As of late February, Indiegogo's 600,000-plus campaigns have collectively raised more than $850 million through the site, and 55 campaigns raised more than $1 million each. Once known for helping filmmakers and a handful of local businesses, it now doubles as a viable launching pad for startups and testing ground for major companies. To cite just two examples, MIT roboticist Cynthia Breazeal raised close to $4 million to fund her home robot/virtual assistant, Jibo, which hits the market later this year. And General Electric unit FirstBuild launched icemaker Opal on Indiegogo and raised nearly $3 million.
"For us, it's pretty simple," says the energetic Ringelmann, while perched in the common area of the company's San Francisco offices. "If you have an idea and aren't breaking any laws or causing any harm, you should have every right to raise money."
By now, it's common knowledge that the world of venture capital is monolithically white and male, and hair-raising horror stories of what female founders face in such settings continue to surface with depressing regularity. But Indiegogo data from 2010 show that 42 percent of campaigns that reached their funding goals were run by women. (And, Ringelmann says, half of the 12 Indiegogo-funded films that made it to Sundance this year were produced by women or people of color.) Victory on the platform doesn't depend on old-boy connections, but rather on a high "Gogofactor" score: The harder you hustle--adding perks as your campaign grows, updating supporters--the more Indiegogo promotes your project.
Which has led to surprising business successes. One quintessential Indiegogo campaign: the pair of headphones with cat-ear-shaped speakers through which users can blast music to the rest of the world. Wenqing Yan and Victoria Hu--both recent graduates of UC Berkeley--weren't even sure that they would hit their $250,000 goal when they launched a campaign in 2014 for their Axent Wear Cat Ear Headphones. "This was just a side project that happened to work out while the other ones didn't," says Hu. She thought the headphones, based on a design by Yan from years prior, would get some traction--but be considered too niche by venture capitalists. The campaign raised $3.5 million, and an anticipated 2,500 orders ballooned into roughly 20,000. The two contracted with Brookstone to manufacture the devices.
"We're trying to chip away at all these barriers that require you to have luck to be successful," says Ringelmann, who cites a late-night conversation with her mom as the inspiration for her company. (She was tearful she couldn't help a struggling screenwriter make a film; her mom heard her out, told her to do something about it--"and then hung up," Ringelmann recalls.) The first way Indiegogo attacked those barriers was through perk- or reward-based crowdfunding--raising funds by offering things like T-shirts, DVDs, or product prototypes. But new federal laws mean Indiegogo will have more options for offerings: Final provisions of the crowdfunding portion of the JOBS (Jumpstart Our Business Startups) Act go into effect May 16, after which any investor can participate in equity crowdfunding campaigns.
"People are really watching these businesses grow because of crowdfunding," says Samantha Abrams, co-founder and president of the Indiegogo-funded Emmy's Organics. She would know: She and her partner, Ian Abrams, used Indiegogo to raise $15,000 to redesign labeling on their gluten-free, vegan, and organic food products. Abrams says this helped her company expand distribution from 400 locations in 2010 to 4,000 today.
Kickstarter, Indiegogo's biggest competitor, has decided against going the equity crowdfunding route. CEO Yancey Strickler has said offering equity in projects would run counter to his platform's mission of funding seemingly unfundable projects. But Indiegogo plans to allow nonaccredited (read: nonmillionaire) investors to participate in equity crowdfunding once that option becomes available.
For Ringelmann, the challenges posed by incorporating new equity crowdfunding rules feel familiar--a little bit like, say, when the term crowdfunding was greeted by blank stares. "There isn't a label for the industry that we're building right now, which is the industry of bringing ideas to life," she says. "The industry of enabling entrepreneurship doesn't have a title. Yet."