Indiegogo Crowdfunding Review: Good for Flexible Funding and Equity or Charity Funding

Indiegogo Crowdfunding Review: Good for Flexible Funding and Equity or Charity Funding

Compare Small Business Loans


{"buttonText":"See Offers","buttonDisclaimer":"","customEventLabel":"","formID":"us-quote-form--small-business-loan-3275f9123ed257ad","submitURL":"\/small-business\/compare\/value_1","title":"Compare Small Business Loans","style":"dropshadow"}

We recommend Indiegogo for projects that don't need to meet a specific funding goal to succeed, for businesses that want equity financing and for individuals raising funds for charitable causes. Indiegogo has three main platforms on its site: traditional reward-based crowdfunding, equity crowdfunding and cause-based crowdfunding. Fees for the reward-based crowdfunding site are comparable to the industry standard. One big point of differentiation between Indiegogo and Kickstarter is that Kickstarter is bigger and arguably has better brand recognition among the general population. If you choose to crowdfund on Indiegogo, you could lose out on some of this visibility and exposure.

Indiegogo Review: Is It Right for Your Business?

We think Indiegogo is a good choice for project creators who want flexible funding or charity and equity crowdfunding. Indiegogo has a reward-based crowdfunding platform, an equity crowdfunding platform and a charity-based platform. For reward crowdfunding, you can select between flexible and all-or-nothing funding. Fees, we have found, are comparable to any other reward crowdfunding site. Indiegogo is not as big or as recognizable as Kickstarter, so you may lose out one some marketing and media exposure if you choose Indiegogo.

Good for…Bad for..
  • Flexible funding
  • Nonprofits and charities
  • Equity crowdfunding
  • Less brand visibility than Kickstarter
  • PayPal payment processing

The Pros of Using Indiegogo

Indiegogo offers flexible funding in addition to all-or-nothing, making it a better option for projects that don’t need to meet a hard funding goal to succeed. Some crowdfunding platforms, like Kickstarter, only have all-or-nothing funding, so if you don’t meet your goal, you’ll have to return all of the money to your backers. Project creators can also opt to InDemand funding, which allows campaigns to continue raising money after their funding period has ended. This can be a great way to keep the ball rolling with your campaign if you’ve met or exceeded your funding goal or passed your funding deadline.

While Indiegogo may not be the biggest crowdfunding site, it tries to differentiate itself by offering more product and campaign support to business owners and project creators. For instance, Indiegogo partners with Amplifier and Brookstone to provide fulfillment assistance to campaigns, and has Amazon and Newegg as some of its primary retail partners. You can also track and evaluate your campaign through Google Analytics, Google ad tracking and Facebook ad tracking.

Indiegogo also stands out for the types of crowdfunding it offers, from traditional reward-based crowdfunding to equity crowdfunding and specialized crowdfunding for nonprofits and charities. Generosity, Indiegogo’s charity fundraising platform, lets individuals and nonprofits raise funds for charitable causes without any platform fees. If you’re looking for equity financing, you can apply through the platform’s equity crowdfunding arm, called First Democracy VC, which Indiegogo launched in partnership with MicroVentures.

The Cons of Using Indiegogo

Indiegogo doesn’t review reward crowdfunding applications like Kickstarter does, allowing almost anyone to start a project. Because there’s no formal review process, lower quality projects are more likely to appear on the site -- which may hurt the platform overall. And overall, Indiegogo is smaller and slightly less recognizable than Kickstarter. This means that your project may not get the visibility or exposure that could come with other crowdfunding platforms because of the perceived difference in brand quality.

Indiegogo also recently dropped support for PayPal in the U.S., so the primary way that backers can contribute is through credit card payments. Not only does this potentially place limits on the types of backers who can donate, but it can also be an inconvenience for project creators or businesses that rely heavily on PayPal. If you need flexibility in how your backers pay, you may want to consider a different funding platform.

Like most reward crowdfunding platforms, Indiegogo is best suited for consumer-facing products and creative projects. Projects that have been very successful include beehives, smartphones, jackets, backpacks and bikes. If your business doesn’t fit into these categories or you need to raise money for cause, we recommend considering the equity or charity crowdfunding platform instead.

Final Thoughts

We think Indiegogo can be a good option for crowdfunding projects that don't need to hit a specific funding goal to succeed, for equity crowdfunding and for nonprofits or individuals raising money for a charitable cause. Indiegogo isn’t quite as big as Kickstarter, so you may lose out on some additional exposure because of brand visibility. Additionally, the platform does not review applications, so there may be lower quality projects on the website than at other crowdfunding platforms. Finally, Indiegogo does not support PayPal for U.S.-based projects.

Eligibility Criteria

Almost anyone can create a project or campaign on Indiegogo. To be eligible, your project must meet the following criteria:

  • Cannot offer the following items as perks: raffle, lottery or gambling; alcohol; shares in the venture or future profits; weapons or related items; controlled substances or drug paraphernalia

Indiegogo has few rules about what kind of projects can be launched, and the company doesn’t review applications before they are launched on the site.

Indiegogo Pricing and Features

Indiegogo has a standard reward-based crowdfunding platform as well as an equity crowdfunding website, launched in partnership with MicroVentures.

Reward-Based Crowdfunding Features

Similar to Kickstarter, funding can last from one to 60 days, and there are platform and payment processing fees.

Funding duration1 - 60 days
FundingFlexible or all-or-nothing
  • Indiegogo fee: 5% of total funds raised
  • Credit card processing fees: 3% + $0.30 per pledge

Equity Crowdfunding Features

Depending on what type of crowdfunding you pursue, you can either raise money without limitation or only up to $1 million.

Funding limit
  • $1,000,000 for Title III offering (Regulation Crowdfunding)
  • No limit on 506(c) offering (Regulation D Crowdfunding)
Funding TimeTwo weeks (average)
  • Commission fee: 7% of funds raised
  • Equity fee: 2% of funds raised
  • Regulatory and legal review fees: $5,000 - $6,000 (average)

Application Process

For reward crowdfunding, you can start an application by creating an account on Indiegogo. You’ll need to complete the full application before launching your campaign. Indiegogo will ask for information about what your project is, including what types of product or service it is and how long you want to fund. You’ll also need to provide a compelling video and written pitch to secure the interest of backers. The better your pitch, the higher your chance of meeting your funding goal. Next, you’ll need to provide information on the perks that you’ll offer your backers. You have complete control over how many perks you offer and what you give your backers.

You can also add team members to the project, and they will have control over managing the campaign. Finally, you’ll need to enter some information about your funding, including the type of funding, what form of payment you are willing to accept and your bank account information. As an extra step, you can also set up campaign analytics through Google Analytics, Facebook ad tracking and Google ad tracking. You can also opt-in to the InDemand feature.

How Does Indiegogo Compare to Other Crowdfunding Platforms?

If you’re thinking about launching a crowdfunding campaign, it’s best to pick the platform that’s most suited to your needs.

Indiegogo vs. Kickstarter

We recommend Kickstarter for fixed funding, as that’s what the platform specializes in. Fees and pricing-wise, Kickstarter and Indiegogo are very similar, so you won’t see any significant cost differences between the two. Kickstarter is arguably the better known brand among the two, and this may give you a leg-up for your marketing efforts. Kickstarter also reviews applications before they go live, which ensures the quality of the content on the site and can give you more confidence that your project will meet its funding goal. Unlike Indiegogo, Kickstarter does not offer flexible funding and it has no other platforms for equity or charity fundraising.

Indiegogo vs. GoFundMe

GoFundMe is very similar to Indiegogo Generosity as both sites focus on cause-based and charity funding for individuals or organizations. However, GoFundMe charges a platform fee of 5%. While both platforms have payment processing fees, Generosity does not charge any platform fees. This should be a major consideration between the two platforms. The other consideration is that GoFundMe has been around longer than Generosity, and only focuses on cause-based giving. This could amount to more exposure or recognition for your cause.

Indiegogo vs. Patreon

Patreon is best suited for content creators who want to monetize their content through a subscription-based service. For instance, a popular vlogger could create a Patreon account and offer subscriptions to backers. The backers could choose to contribute monthly or on a per-creation basis for almost any amount they want -- whether that’s $5 or $1,000. We think content creators, vloggers, podcasters, musicians and artists will have the best luck taking advantage of the Patreon platform. In fact, video games, home improvement videos, true crime podcasts and psychology lectures are some of the most funded creations on the website.

Justin is a Sr. Research Analyst at ValuePenguin, focusing on small business lending. He was a corporate strategy associate at IBM.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.