ENT 650

Crowdfunding – Week 5 ENT 650

Crowdfunding Assignment

By: Mackensie Jimison

ENT 650

I chose Indiegogo for my crowdfunding site, I chose it for three main reasons:

  1. It is the largest global funding site, which means to me that it has been around a while and had many successes to be able to get so many people to want to use their site.
  2. One of their most popular types of businesses that they raise money for is travel, travel would be what I would want my business to be under as a type of Airbnb.
  3. Over 47% of the successful campaigns with Indiegogo are run by women, this site proves to be a good one for women starting small businesses.

Indiegogo’s Mission: “At Indiegogo, our mission is to empower people to unite around ideas that matter to them and together make those ideas come to life. With the help of our Indiegogo community, we’re redefining entrepreneurship—shifting it from being a privilege to a right. Because every inventive idea should have its shot, and every creative entrepreneur should have their moment. Together, we can do anything.”

There really aren’t any requirements for starting a campaign besides that the minimum funding amount is $500. They are all about allowing anyone to raise money for any idea or project.

Step 1: Sign up for the website
Step 2: Fill out the Basics: Campaign title, tagline, card image, location, category, tags, campaign duration,
Step 3: Story: create a video campaign of 2-3 min., campaign overview, campaign pitch
Step 4: Perks: create perks for incentive to supporters
Step 5: Items: what are the items being offered to backers when they claim the perks?
Step 6: Team: contact information
Step 7: Funding: flexible funding or fixed funding, credit card setup, bank account holder, campaign goal amount.
Step 8: Extras: Campaign share link, Facebook share, create short URL, google analytics, google ad tracking, facebook ad tracking, additional links, video gallery, image gallery
Step 9: InDemand: to keep growing your contributions and audience after the campaign is over.
Step 10: Review and launch campaign to go public.

 

Indiegogo has a success average of 9.8% and that is for 100% reaching their financial campaign goal. Success rate is 17.1% of fixed funding, this is all or nothing of reaching their goals, and 95.6% of flex funding campaigns are successful where they can keep whatever amount of money they raise even if they don’t reach their goal.

Fees: 5% platform fees on all funds raised. It’s free to set up an account and then take 5% from the amount of funds that you raise regardless of the goal amount. Processing fee of 3% + .30 cents per transaction. If a fixed funding, all or nothing, does not meet their goal they are not charged a fee and all backers are refunded their contributions. They may charge an extra $25 transfer fee if you don’t have a US bank account. For InDemand projects, platform fees are also 5% and 8% if you ran your campaign on a different platform.

Funds will be sent 15 days after the end of the campaign, it has to go through a process where they review and process campaign through the bank account, then it goes through a disbursement cycle and then funds are sent out the follow week. I imagine if it does not pass the review process the money will not be approved and sent. Funds are held through the end of the campaign, if you do not raise the minimum requirement of more than $100 then all the money will be refunded to the backers.

For tax purposes a 1099-K needs to be filled out if the campaigns exceed over $20,000 or if your campaign had more than 200 contributors. Along with this form a W-9 will also need to be completed. Indiegogo suggests that you still receive advice from a tax accountant if you don’t meet the requirements for filling out the 1099-K.

 

Resources:

(n.d.). Retrieved October 02, 2017, from https://www.indiegogo.com/about/our-story

Yeh, A. (2017, April 11). Indiegogo’s 2015 Year In Review [Infographic]. Retrieved October 02, 2017, from https://go.indiegogo.com/blog/2015/12/2015-crowdfunding-infographic-statistics-tech-film-social.html

Alois, J. (2014, August 28). Crowdfunding 101: Kickstarter & Indiegogo (Infographic) | Crowdfund Insider. Retrieved October 02, 2017, from https://www.crowdfundinsider.com/2014/08/47987-crowdfunding-101-kickstarter-indiegogo-infographic/

Fees & Pricing for Campaigners: How much does Indiegogo cost? (n.d.). Retrieved October 02, 2017, from https://support.indiegogo.com/hc/en-us/articles/204456408-Fees-Pricing

When Do I Get My Money? (n.d.). Retrieved October 02, 2017, from https://support.indiegogo.com/hc/en-us/articles/204484508-When-Do-I-Get-My-Money- “When Do I Get My Money?” Indiegogo Help Center.

Will I Receive a Tax Form? (n.d.). Retrieved October 02, 2017, from https://support.indiegogo.com/hc/en-us/articles/204738008-Will-I-Receive-a-Tax-Form-

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One thought on “Crowdfunding – Week 5 ENT 650

  1. Mackensie,
    I had also chosen Indiegogo for our crowdfunding assignment because it had a good contribution history and very little entrance barriers. Initially I thought Indiegogo’s campaign restrictions of fort days and forty nights seemed way too short but once I heard their rational it made sense. The key for a campaigner to raise awareness is to entice and educate. I also like the fact that they provide experts to assist in making a campaign as successful as possible.

    Also being able to collect funds regardless if campaign is met allows the campaigner to still have funds, if only in part.

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