When you select a crowdfunding platform, you might be comparing Kickstarter vs Indiegogo. In many ways they resemble each other, but there are also some important differences.
First of all, they are both crowdfunding platforms. Both allow a wide variety of crowdfunding projects to be posted and shared with the world. Both encourage displaying a crowdfund campaign for a limited amount of time. And both are frequently advertised on Best Crowdfunding Websites. There are, however, some important differences.
Kickstarter is a rewards-based platform that only pays out funds to the project owner upon the project becoming fully funded. This means that contributors are only charged for their pledges if the campaign reaches its target amount – whether it is $10.00 or $10,000.00. Kickstarter does not allow collection of money for charitable causes. Its purpose is to provide funding for entrepreneurial ventures that have a specific end in sight. With that said, Kickstarter crowdfunding campaigns cover a broad variety of projects ranging from publishing ebooks or manuscripts to startup costs for a business. Since it is a rewards-based platform, crowdfunders need to organize tangible products that can be used as incentives for pledging an amount to support the campaign.
Kickstarter is primarily set up to support creative endeavors such as selling copies of a book, art work, or a product. Sometimes the products are completed, sometimes they are in progress. The funds might provide money for an advertising campaign, or a production run with a manufacturer. Sometimes the money is used to expand a line of already existing goods. Rewards-based means that for each contribution, there is a tangible reward given to the contributor – whether it is an email, a newsletter or something more substantial – such as a sample of the product that is being sold, a poster or some other associated item.
Kickstarter does charge for services. After all, someone has to pay for the servers, the building in which to house them, and for the electricity to run them. And that is probably just the tip of the iceberg when it comes to their costs for running the platform. They charge 5% of proceeds if the campaign succeeds. If it is not successful, the campaigner owes nothing.
On the other hand, when comparing Kickstarter vs Indiegogo, the latter supports flexible funding. Flexible funding is a system where no matter what sort of contribution is made, the crowdfunder has immediate access to the money sent. This makes it great for a variety of projects, from funding set-ups for conventions or events, to purchasing supplies or equipment for a business. It can even be used to fund event tours for musicians or speakers.
Indiegogo also charges for its services. However, because funds are available to campaigners as soon as they are paid in, they charge 9% of the income for unsuccessful campaigns and 4% for campaigns that reach their initial goal. That might seem a little upside down, but it certainly is an added incentive for putting effort into running a successful campaign.
Indiegogo is a little more flexible about the sorts of campaigns that can be run. It supports, as mentioned, things like signing tours for your new book or traveling to a convention to sell your merchandise. However, with that said it should be remembered that Indiegogo tips also say that campaigns that offer incentives are more likely to succeed than those that do not. Crowdfunders like to have something for their efforts – whether it is a t-shirt displaying your logo, or their name on the biggest, baddest villain in your new digital game.
Neither Kickstarter nor Indiegogo support selling shares in a business or giving dividends on profits as rewards. They are not set up for that kind of campaign. Nor are do they accommodate peer-to-peer lending campaigns. Furthermore, all products offered on these platforms must be legal to sell.
When comparing Kickstarter vs Indiegogo, there are a number of things that are the same. Both recommend staying in touch with your contributors. Even if your campaign does not succeed, you are building a fan base for your product. Furthermore, you are learning what sorts of advertising works for your product, and whether or not you are reaching the correct audience.
Both recommend creating a captivating video to display on the crowdfunding campaign website. Viewers like, not only to see still pictures of the product, but also to see and/or hear you, the entrepreneur that is offering the product or service. And, of course, both recommend following through with completing products, by keeping your supporters in the loop as merchandise is created or delivered, and by sending out your campaign incentives as quickly as they are available. They advise setting up a realistic budget that is the lowest amount you can request and still succeed with your campaign, while fulfilling promises to contributors. However, you can add stretch goals – things you will do if the campaign succeeds beyond your wildest dreams.
Kickstarter and Indiegogo both encourage crowdfund campaigners to try again if their first campaign is less than fully successful. Crowdfunders can learn from their first run, and they can pull back in the audience they reached with the first effort.