Indiegogo vs. Kickstarter: Which is Better for You?

If you’re a budding entrepreneur, you have likely heard of the various online platforms that you can take advantage of to help you raise capital for your business ventures. Thanks to crowdfunding, it’s easier than ever to turn your dream into a reality. Both Indiegogo and Kickstarter have made quite the name for themselves in the crowdfunding scene. Between the two, nearly a million projects have been successfully funded since their inception. But which one is the better option for you ? That’s exactly what we’re going to discuss. We sat down with our tech and finance moguls here at Seek Capital to get the inside scoop on each platform so that you can make an informed decision about how you want to finance your next big project.

Crowdfunding 101

If the idea of crowdfunding is new to you, it’s something that you might want to explore. With crowdfunding, you get your financial backing from people who are interested in seeing your project come to life. Those who fund your projects are called “backers.” Depending on the platform you use for crowdfunding, you may be required to reward your backers. Rewards can vary wildly but are often things like listing your backers’ names in the credits, sending them specialized versions of your finished goods, early access, and so on. Kickstarter and Indiegogo do more for your project than just secure your financing – which is a big deal in and of itself. They also provide a way to advertise your brand so that more people are aware of it. Some crowdfunding platforms will even help you with marketing your projects and more.

Indiegogo vs. Kickstarter

Indiegogo

Whereas Kickstarter has a bigger focus on promoting media and products that lean more toward creative and serviceable, Indiegogo supports a wider range of projects and ideas. Anything from health and fitness, mobile phone goods, technology, education, and more can find a home at Indiegogo. Kickstarter clearly has a creative mission that they often adhere to. Not so much with Indiegogo. As such, Indiegogo may be the perfect platform for you if your project doesn’t meet Kickstarter’s provisions. What’s more, Indiegogo is responsible for helping raise money to get movies made, if that tells you anything. Rules for Campaigning Indiegogo isn’t as strict when it comes to the kinds of projects they support. While it’s a great platform for helping you produce real-world products, Indiegogo also allows users to campaign for nonprofit fundraisers; something Kickstarter doesn’t allow. With that being said, personal cause campaigns aren’t supported by either crowdfunding platform. Another big difference that may help you in your decision is that Indiegogo allows for investment opportunities. You can approach your backers with investment opportunities into your brand if your vision is successful. With Kickstarter, this is prohibited. Also, while both Kickstarter and Indiegogo have specific Terms of Service that users must follow, as long as you adhere to the rules written therein, you can offer your backers rewards. Applying Since there isn’t an approval process with Indiegogo, all you have to do is get together your campaign materials prior to launching your campaign. As such, you will need to create a pitch video that sells your project to investors, as well as a detailed description of your project. Your pitch needs to outline why you need funding and what you intend to do with it once it is received. You should also explain the rewards that you’re planning on providing to your backers. If you have a website or Facebook page, be sure to link that in the description. The more information that you can provide to your potential backers, the better. Remember, your goal is to sell yourself. You can increase your chances of securing the funding you need by including lots of details about your project. Pros Indiegogo’s support network is quite extensive and can provide the assistance you need to walk you through each step of getting your project off of the ground and running. Indiegogo also has an online Marketplace that you can use to sell your goods and services, similar to Amazon or eBay. You aren’t limited to how long you can use the Marketplace, either. Long after your project has been successfully financed, you can continue selling on Marketplace. Cons As good as Indiegogo is, it simply doesn’t have the recognition or reach that a platform like Kickstarter has. As such, you may need to put in more work to get your name out there and sell your project once it’s complete.

Kickstarter

Kickstarter is hands-down the most prominent crowdfunding platform on the internet. With nearly 200,000 successful projects backed by Kickstarter, it continues to reign supreme among entrepreneurs. Although this platform leans more toward creativity, such as video games, music, and other media, it’s still a great place to try your hand at raising the funding you need to see your project through to the end. As long as your project is something that can be shared with the world when complete, Kickstarter may be able to provide the assistance you need. Just remember, charities and personal campaigns are out. So you will have to try elsewhere if you want to raise money for a cause. Rules for Campaigning Kickstarter is pretty strict about supporting projects pertaining to the arts. Artists stand a much better chance of getting funded, so you may have a difficult time gaining traction if your project doesn’t have to do with the arts. To help you better understand how Kickstarter works, let’s observe a few of its rules and regulations.

• From technology to movies, your project must be something that can be shared with others when it is complete.
• A prototype is required to show to backers if your project is something that needs to be created from the ground up.
• Raising money for charities is prohibited. As such, you’ll have to look elsewhere for capital if you’re trying to support a cause.
• No equity, investments, or revenue sharing for backers of your projects. It’s a simple cash-only transaction between you and your backers.
• Some goods are prohibited from support on Kickstarter. If it falls under one of their prohibited items, you’ll have to take your project elsewhere.

Applying You’re going to have to get approval from Kickstarter before you can receive funding from backers. As such, you’ll need to fill out an application for review. This application asks some pretty standard questions, such as what the funding is going toward and your plans once you get it. As with Indiegogo, you will need to create a video pitch of your project, along with a detailed description. You’ll also need to outline your rewards system for backers who finance your project. Once you have uploaded this information, Kickstarter will review it for approval. If your project is deemed worthy of Kickstarter’s guidelines, you can proceed with launching your campaign. This is all on you, as you are responsible for promoting your project on Kickstarter once it gets approved. Pros A 5% fee is given to Kickstarter if you reach your funding goals. If you don’t reach it, you don’t owe Kickstarter anything. Being such a big name in the crowdfunding industry, Kickstarter can help you become successful based on their platform alone. This has helped many people get off the ground, becoming huge successes because they used Kickstarter to get their name out there. Cons If your project doesn’t reach its goal, you don’t get to keep any money that was backed. It’s either all or nothing when you use Kickstarter. This can be very disappointing, especially if you get really close to meeting your goal. Not only do you not get a dime, but you’re also out all the time and energy you put into trying to get your project funded.

Processing Fees

Both Kickstarter and Indiegogo will take their fair share of your funding. This is how crowdfunding platforms finance their operations and stay in business. With Kickstarter, you can expect 3% to 5% of your funding to be taken out. If you don’t meet your goal, however, you don’t have to worry about paying Kickstarter anything. Kickstarter takes 5% of your total funds raised, so if you don’t meet your target, they don’t charge that fee. (But if you do meet your target, you’ll need to deduct that 5%.) Their payment processing fees are between 3% and 5%. Take a look at the full Kickstarter fee breakdown here. Indiegogo will take 5% of all funds raised. You will also be charged a 3% credit card processing fee, plus $0.30 per transaction.

Summary

Bottom line, Kickstarter only lets you use money given by backers if you meet your funding goal. Indiegogo, however, lets you keep anything that you’ve raised, regardless of whether you meet your goals. It’s important to consider the trade-off here, as Kickstarter is the better choice for helping your brand get recognized due to its popularity and reach. For more resources to get you started with your business, check out the Seek Capital blog! Sources https://www.kickstarter.com/rules/prohibited https://www.kickstarter.com/help/fees https://support.indiegogo.com/hc/en-us/articles/204456408-Fees-Pricing-for-Campaigners-How-much-does-Indiegogo-cost-