Indiegogo

Definition

Indiegogo is a popular crowdfunding platform that allows individuals and organizations to raise funds for a wide range of projects, from creative endeavors to innovative products and social causes. It serves as a special funding strategy that enables entrepreneurs and creators to bypass traditional financing methods and directly engage with a global community of backers and supporters.

5 Must Know Facts For Your Next Test

1. Indiegogo was founded in 2008 and has become one of the largest and most well-known crowdfunding platforms globally.
2. The platform allows creators to launch campaigns for a wide range of projects, including new products, creative works, social initiatives, and more.
3. Backers on Indiegogo can choose to support projects in exchange for rewards, such as early access to the product, exclusive merchandise, or other perks.
4. Indiegogo offers both fixed-funding and flexible-funding models, allowing creators to determine the type of campaign that best suits their needs.
5. The platform's success has made it a popular choice for entrepreneurs and startups seeking alternative funding sources to traditional venture capital or angel investments.

Review Questions

• Explain how Indiegogo functions as a special funding strategy for entrepreneurs and creators.
  • Indiegogo provides entrepreneurs and creators with an alternative funding strategy to traditional financing methods. By leveraging the power of crowdfunding, Indiegogo enables individuals and organizations to raise funds directly from a global community of backers who are interested in supporting their projects. This special funding strategy allows creators to bypass the traditional gatekeepers of investment and instead engage directly with their target audience, who can contribute financially in exchange for rewards or the opportunity to be part of the project's development.
• Describe the different crowdfunding models available on Indiegogo and how they cater to the needs of creators.
  • Indiegogo offers two primary crowdfunding models: fixed-funding and flexible-funding. The fixed-funding model requires creators to reach a predetermined funding goal within a set timeframe, or the campaign will not be successful, and backers' contributions will not be processed. The flexible-funding model, on the other hand, allows creators to keep any funds raised, even if they do not reach their goal. This flexibility enables creators to launch campaigns that may not have a clear funding target, such as creative projects or social initiatives, and still benefit from the support of backers. The choice of funding model allows creators to tailor their campaigns to best suit the needs and expectations of their target audience.
• Analyze how Indiegogo's success has influenced the broader entrepreneurial ecosystem and the way startups and small businesses approach funding.
  • The widespread adoption and success of Indiegogo as a crowdfunding platform has had a significant impact on the entrepreneurial ecosystem. By providing an accessible and global funding source, Indiegogo has empowered entrepreneurs and creators who may have previously been overlooked or lacked access to traditional venture capital or angel investments. This has democratized the funding landscape, allowing innovative ideas and projects to gain traction and support directly from the public. The success of Indiegogo has also inspired the development of other crowdfunding platforms, further diversifying the funding options available to startups and small businesses. This shift has encouraged entrepreneurs to explore alternative funding strategies, such as crowdfunding, as a viable complement or even alternative to traditional financing methods, ultimately shaping the way the entrepreneurial community approaches funding and capital raising.

Related terms

Crowdfunding: The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet.

Backer: An individual who contributes financially to a crowdfunding campaign in exchange for rewards or equity.

Reward-based Crowdfunding: A crowdfunding model where backers receive non-monetary rewards, such as the product being developed, in exchange for their contributions.