Just about everyone has a million-dollar idea come to them at some point during their life. What separates millionaires from the rest of us is that they took the initiative to bring their projects to life. Part of this process may include raising the funding required to get it off the ground.
Unfortunately, the folks with a lot of money are generally only offering it to people that don’t need it. Game producers hold all the keys, keeping projects by independent developers from lifting off the ground unless that developer is either well connected or very lucky.
Inventors have to deal with the costs of developing a prototype and bringing their invention to market. Often, the middle men required to make this happen take more than a fair share of their cut in the process. Why give someone a cut of your creation when you can handle everything on your own?
Enter Indiegogo and Kickstarter, two of the most popular crowd funding sites currently connecting project creators with the funding they need to make their dreams come true. In exchange for a generous reward, investors willingly give up their cold hard cash to see your dream become a reality.
The question facing project creators? Which service should you go with to get the funding you need?
What They Have in Common
Both Kickstarter and Indiegogo allow you to set various reward tiers that allow you to offer rewards for donations made at various levels. For example, a $5 donation might earn a contributor a mention on your website or a letter from the folks behind the project. A $50 contribution may get the contributor (called a backer on Kickstarter) a commemorative t-shirt or even a copy of whatever it is the project is helping come to life might be the offered reward.
Both of these sites offer an all-or-nothing project type. That means that if you don’t raise the funds you need to move forward, none of the pledges are collected and you receive nothing. The benefit of this is that you’re not placed on the hook for rewards you might not have the ability to produce when you’re short on funding.
Both sites host projects in a variety of areas from film to gadgets. While each has its own set of community guidelines, there is a good chance that whatever project you’re undertaking can find the funding it needs on either Indiegogo or Kickstarter.
How They Differ
Indiegogo offers users the ability to accept funding even when their goals are not met. This comes at a higher percentage (9% underfunded versus 4% for fully-funded projects) but it can help you avoid falling just a hair shy of your goal and losing any chance of funding as a result.
Kickstarter is currently the big man on campus as far as crowdsourced funding sites go. This doesn’t mean that it is better than Indiegogo, but it happens to be the brand people use to describe crowdsourced project funding. It’s almost like how making a copy of something is referred to as a Xerox. This may mean more brand recognition and inherent trust from the masses as they gravitate to your project page. That said, Indiegogo is known for its greater sense of community. A slightly more lax list of restrictions on projects helps, too.
If you had to choose between the two, the biggest difference for contributors is how you make your payments. Indiegogo accepts payments from virtually all major credit cards as well as PayPal. Kickstarter processes payments through Amazon so you have a similar range of payment options, though the project creator will incur a fee from Amazon once collection takes place.
The current fees for projects funded on Kickstarter is 5%. Indiegogo’s fees start at 4% and raise to 9% if you fail to reach your funding goal. That makes Indiegogo a better deal for folks with fully-funded projects and the only option for folks willing to self-fund to make up the difference should they miss their goal amount.
What do you think? Have you used either Kickstarter or Indiegogo in either a campaign creator or contributor capacity? Let us know about your experiences in the comment section below.