"A new way to fund creative projects" and "democratizing the way ideas get funded and realized across the globe" are the two mantras from the crowdfunding behemoths Kickstarter and Indiegogo respectively. Crowdfunding has come a long way since Indiegogo launched in 2008, shortly followed by Kickstarter in 2009. Yet there is still plenty of room for growth within the industry. Fortune, referring to studies conducted by Massolution and the World Bank, expects the global crowdfunding market to exceed $90 billion by 2025 or nearly two times the size of the current global venture capital industry. As crowdfunding unyieldingly enters the financial landscape, more and more entrepreneurs and business hopefuls will too. Odds are, if you are reading this post, you are one of them. So the question is not whether or not you will use crowdfunding, but rather which platform would provide you with the best results.
Not interested in either Kickstarter or Indiegogo? Check out other crowdfunding platforms
What are you allowed to crowdfund?
If you drill down deep enough, you will find that Kickstarter has many restrictions. The general rule of thumb is that Kickstarter is for creative projects and not causes. Per their website, "Everything on Kickstarter must be a project. A project has a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it. Kickstarter does not allow projects to fundraise for charity or offer financial incentives". Kickstarter also prohibits a number of items, including political fundraising, weapons, alcohol, and pornography. Because of these restrictions, all projects must be submitted to Kickstarter for approval prior to becoming an active campaign.
Conversely, Indiegogo is completely open to anything. From what I can tell after perusing the website's campaigns, support articles, and blogs, any idea can be funneled through the site and there is no approval process. "We have a simple mission: to empower everyone to change the world, one idea at a time. We provide the tools to help campaigns—large and mainstream, or small and personal—boost the awareness and funds to get there". Some of Indiegogo's categories that you may not find on Kickstarter include Small Business, Environment, Religion, and Politics.
How to run a successful Indiegogo campaign
Strictly a fixed funding platform, which means that you have to reach your campaign's goal to receive the money. If you raise a partial amount, then you receive nothing and the backers (donors to the campaign) are never charged. To illustrate this, let's imagine that a campaign is trying to raise $1,000. If by the close of the campaign $999 were raised, no one receives the money, the backers are not charged, and there are no fees. For the details on fees please see the Table of Fees below. Kickstarter also requires campaign owners to use Amazon Payments to collect funds from users.
You have the choice of fixed funding (which is similar to Kickstarter's funding explained above) or you can choose flexible funding. Flexible funding allows you to keep whatever you raise whether it be 1%, 100% or 1,000% of your goal. Indiegogo used to charge different fees depending on the amount raised (4% if the goal was met and 9% if it was not) but now uses a flat 5% for both fixed and flexible funding. See details in the Table of Fees below. Concerning payments backers can use a debit or credit card or PayPal account.
Table of Fees
Platforms Fixed funding Flexible Funding Payment Processing
Kickstarter 5% N/A 3% + $0.20/pledge1
Indiegogo 5% 5% 3-5% + $25 wire fee2
1 For donations under $10 the processing fees are 5% + $0.05
2 The percentage varies depending on your financial institution. The wire fee is a one-time charge.
Which countries can create campaigns?
United States, United Kingdom, Sweden, Norway, New Zealand, Netherlands, Ireland, Denmark, Canada and Australia. This doesn't mean that people from other countries have not run campaigns on the platform, but they do have to have a physical address and valid bank account in one of these countries.
Traffic and overall feel
Kickstarter is larger in both money raised and monthly website traffic. According to their website, over $1.5 billion have been pledged and over 77,000 of campaigns were successful. Quantcast, a technology company that specializes in audience measurement, estimated Kickstarter's unique visitors last month (January 2015) to be at 18.5 million. Kickstarter is the household name for crowdfunding and it identifies most with creativity and the arts. It also has a better reputation than its counterpart below when it comes to crowdfunding scams. This, no doubt, is aided by its campaign approval policy.
Although Indiegogo trails Kickstarter in traffic and funding dollars, it is still a giant in the crowdfunding industry. Quantcast's estimate for unique visitors to Indiegogo's website last month (January 2015) to be 9.2 million. Recently too, Indiegogo launched a sister platform called Generocity (originally called Indiegogo Life), which is strictly for raising money for yourself or a loved one. This move stripped out many of the non-product campaigns and consolidated them elsewhere while preserving the traditional crowdfunding campaigns on Indiegogo. It is also worth noting that Indiegogo Life has no fees with its campaigns, other than a 3% processing fee.
We will periodically update this post's information to keep it up-to-date with the changing crowdfunding landscape. Please comment below with any discrepancies or information that you would like to see added.