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Crowdfunding, a compelling way to raise funds and generate buzz for a new entrepreneurial endeavor, is almost synonymous with .
While Kickstarter is a major platform, several other crowdfunding sites are worth considering before you launch a campaign. There are a few factors to mull over before choosing a platform.
- What kind of support are you looking for from this platform?
- Is there a niche audience you can target, or does your project have mass appeal?
- Are you willing to share revenues in order to get your project off the ground?
Once you’ve answered those questions, here’s a sample of Kickstarter alternatives to consider.
Kickstarter vs. Indiegogo: Like ‘Coke vs. Pepsi’
For entrepreneurs interested in a standard, sophisticated crowdfunding platform that offers different features to Kickstarter, Indiegogo is likely the best choice.
“The tradeoffs are like Coke versus Pepsi,” said Joe LeMay, cofounder and CEO of Rocketbook, a company that’s run multiple successful campaigns on both platforms.
The basic fees are similar: Indiegogo charges a 5 percent platform fee, as well as a processing fee of 3 percent plus a 30 cent third-party credit card fee. On Kickstarter, if your project is successfully funded, you’re charged a 5 percent fee, as well as a payment processing fee between 3 percent and 5 percent.
There are some key differences: Unlike Kickstarter, Indiegogo has no application or approval process for starting a campaign. With Kickstarter, a creator only keeps the money raised if the campaign is successful. With Indiegogo, you have two options: “flexible funding” allows you to keep all the money raised regardless of whether your goal is met, while “fixed funding” has specific funding goals that must be met. Indiegogo says the latter is a good choice for projects that require set funding to enter production.
“Kickstarter has its own sort of flavor of community — it’s definitely the larger,” LeMay said.
It’s hard to make an apples-to-apples comparison between the two platforms in terms of size or success rates, given they don’t share all of the same data. Kickstarter, however, does by some metrics appear larger: Since the platform was launched in 2009, Kickstarter backers have pledged a total of $3.2 billion to projects on the site, of which there have been more than 360,000.
By comparison, Indiegogo campaigns have raised more than $1 billion collectively since that platform’s launch in 2008. More than 275,000 campaigns have launched on Indiegogo.
Size is certainly an intrinsic benefit when choosing a crowdfunding platform. And Kickstarter’s approval process helps creators feel confident their project is ready to launch. That said, LeMay suggested that Indiegogo has a more hands-on culture that can be valuable for project creators.
“The attention we’ve gotten from the Indiegogo team and the help in running and promoting us has been outstanding,” he said. On top of that, he added, “You might find yourself being more of a bigger fish in a smaller pond, and that can be a really great advantage.”
Additionally, Indiegogo offers more crowdfunding tools for marketing and analytics. Calling itself the “all-in-one launch platform,” Indiegogo offers pre- and post-campaign tools for creators.
LeMay and Rocketbook co-founder Jake Epstein continue to use both Kickstarter and Indiegogo, in part because the latter offers post-campaign services that can be used in conjunction with the former.
Rocketbook raised around $1 million in its first crowdfunding campaign on Indiegogo to launch its more than $1.8 million on Kickstarter and then moved the campaign to Indiegogo’s InDemand option, which lets you keep raising funds and building community support after your campaign ends — even if it was on another platform. Rocketbook has raised nearly another $1 million with InDemand.that comes with an accompanying app for image processing and synchronizing notes in the cloud. The company turned to Kickstarter to fund the second iteration of its product. For its new Everlast notebook, Rocketbook raised
After wrapping up its InDemand fundraising, Rocketbook could transition the project to the Indiegogo Marketplace, which promotes products with dedicated marketing services, whether or not they were crowdfunded. Indiegogo also helped Rocketbook connect with the Amazon Launchpad team, giving the fledgling firm another avenue to promote itself.
Crowdfunding by category: Finding your audience
While creators can use Kickstarter or Indiegogo to raise funds for just about any product, other platforms focus on certain industry verticals or categories of products.
MedStartr, for instance, is a crowdfunding platform for health care-related innovations. With its combination of events, mentors, promotions and other services tailored for the health sector, MedStartr says it has a success rate in health care that is seven times the average for the sector on any other site.
Barnraiser is a platform for healthy, sustainable and artisan food products. The platform boasts a 65 percent success rate by helping small farmers and food producers “connect with millions of people who are seeking a healthy lifestyle.”
The platform Patreon is geared toward content creators. Unlike other platforms that facilitate one-time fundraising efforts, Patreon enables content creators to collect regular contributions from their followers in exchange for the regular production of new material. The site promises a “meaningful revenue stream” and “predictable income.”
After running two successful Kickstarter campaigns to launch her comic series Ava’s Demon, artist Michelle Czajkowski now uses Patreon to keep it going. Her fundraising on both platforms has been so successful she was able to quit her job at DreamWorks and work on Ava’s Demon full time.
“It’s definitely a good way for small creators to make some sort of a living outside of trying to get published,” Czajkowski said of Patreon. “It’s the most democratic platform for making money on a web series. People pay to see you make updates on your work… and they can stop paying you whenever they want.”
Equity crowdfunding: A new option giving backers a stake in the project
Most crowdfunding campaigns ask supporters to back a specific project once, usually in exchange for a specific reward. Recently, however, a new kind of crowdfunding has emerged, thanks to changes in Securities and Exchange Commission (SEC) rules that allow entrepreneurs to offer supporters an equity stake in their business. The new rules went into effect last year, in accordance with the 2012 Jump-Start Our Business Start-Ups (JOBS) Act.
Indiegogo was a major proponent of this rule change. The platform launched its equity crowdfunding option in November, in partnership with MicroVentures.
Fig is another one of the few platforms that’s started to take advantage of the new rules. Fig targets a specific category of projects: video games. After the Fig team decides to back a video game project, the creator signs a licensing agreement giving Fig a portion of the revenue from the video game once it’s published. From the portion it collects, Fig pays dividends to investors who have signed up to back the project on the Fig platform. Fig also keeps a percentage for itself. In the meantime, as video game creators are working on producing their game, they can use the Fig platform to run a traditional crowdfunding campaign with rewards for backers.
Equity crowdfunding is compelling, Fig CEO and co-founder Justin Bailey explained, because it empowers consumers to claim a real stake in video game titles in which they see potential. Bailey and his partners founded Fig after watching high-level support for video game creators on Kickstarter wane over several years.
“A lot of those people who used to give over $100 to Kickstarter campaigns, once they did that, they were done,” Bailey said. “Although people may participate at a lower level, a lot of those higher levels had already dried up. We asked, would those people who were donating at those higher levels resume if they had the opportunity to get their money back? And the answer is overwhelmingly yes.”
Because Fig is literally invested in the outcome of the projects on its platform, it’s more than just a self-service site. “We’re very highly curated; people submit pitches to us, and we do our due diligence to find out if they can deliver the quality and features they say they can deliver,” Bailey said.
Additionally, unlike Kickstarter, every project is spotlighted on the platform and in the Fig newsletter. Already, Fig’s newsletter is larger than Kickstarter’s game newsletter (which covers board games as well as video games). With every campaign it runs, Fig accumulates marketing data specific to video games and the people who are willing to back them. That data helps Fig during the commercial launch of projects.
Because of this comprehensive approach, Fig calls itself a “crowd-publisher” rather than a crowdfunding site. It’s not just about funding, Bailey explained. “It’s about the funding, the development and ultimately the commercial viability of everything on our site.”