Crowdfunding platforms have transformed the way individuals and businesses raise funds for their projects. Two prominent platforms in this space are Kickstarter and Indiegogo. These platforms provide creators with an opportunity to bring their ideas to life. In this article, we will explore the similarities and differences between Kickstarter and Indiegogo, assisting you in making an informed decision regarding the appropriate platform for your crowdfunding campaign.
Kickstarter: Unleashing Creative Projects
Kickstarter, established in 2009, stands out as a pioneering crowdfunding platform that has facilitated the launch of countless creative projects. Focused on arts, design, technology, and entertainment, Kickstarter has become the go-to platform for creators seeking funding for their unique ideas.
Benefits of Kickstarter
LargeCommunity of Backers: Kickstarter boasts a large and dedicated community of backers who actively support innovative projects. It has a strong reputation for attracting early adopters and individuals passionate about discovering the next big thing.
All-or-Nothing Model: Kickstarter operates on an all-or-nothing model, meaning that projects must meet their funding goals within a specified timeframe to receive any funds. This model can create a sense of urgency and encourage backers to rally behind projects they believe in. Plus, you will not be charged if you don’t reach the goal.
High Project Success Rate: Kickstarter has a higher overall success rate compared to other crowdfunding platforms. This may be due to its established reputation and user base.
Lower Fees: Kickstarter's platform fee is generally lower compared to Indiegogo's, which can be advantageous for creators, especially when combined with a successful campaign.
Drawbacks of Kickstarter
Competition and Noise: As one of the most popular crowdfunding platforms, Kickstarter experiences high levels of competition and noise. Standing out from the crowd can be challenging, especially for new creators who lack large following or extensive marketing resources.
Strict Project Approval Process: Kickstarter has a rigorous project approval process, ensuring the quality and integrity of the campaigns on its platform. While this helps maintain a certain standard, it can also make it harder for some projects to get accepted.
Indiegogo: Diverse Crowdfunding Opportunities
Indiegogo, founded in 2008, is another major player in the crowdfunding landscape. What sets Indiegogo apart is its openness to a wide range of projects, including creative endeavors, charitable causes, and entrepreneurial ventures.
Benefits of Indiegogo
Flexible Funding Options: Unlike Kickstarter's all-or-nothing model, Indiegogo offers both all-or-nothing and flexible funding options. Creators can choose to keep the funds raised, even if they fall short of their initial goal. This flexibility can be advantageous for projects that can make use of partial funding.
Global Reach: Compared to Kickstarter, Indiegogo's users are more widely distributed globally, including creators and backers from more than 223 countries and regions. This global reach increases the potential audience for your campaign and opens doors to more international opportunities.
Ongoing Crowdfunding: Indiegogo offers "InDemand," a feature that enables creators to continue raising funds after their initial campaign ends. This can be useful for ongoing product development or marketing.
Expanded Categories: There’s a larger variety of types of projects that are able to be submitted for funding as compared to Kickstarter.
Drawbacks of Indiegogo
Perceived Trustworthiness: While Indiegogo does have project curation processes in place, they are generally considered to be less strict compared to Kickstarter. This relatively more lenient approach may lead to some backers perceiving Indiegogo projects as less reliable or of lower quality. It may require you to put more effort into establishing trust through transparent communication and by demonstrating the credibility of your project.
Platform Fees: Indiegogo charges higher platform fees compared to Kickstarter. Also, it will deduct a certain percentage of funds from your campaign, even if you don't reach your fundraising goal. Creators should carefully consider the financial implications and factor in these fees when planning their campaign budgets.
How to Choose Between Kickstarter and Indiegogo
Deciding between Kickstarter and Indiegogo depends on various factors related to your project, funding preferences, and campaign goals. Consider the following aspects to make an informed choice:
1. Project Type and Audience
Evaluate the nature of your project and identify which platform aligns better with your target audience. Kickstarter's emphasis on creative projects makes it suitable for artists, designers, and tech enthusiasts. Indiegogo's openness to diverse projects offers more flexibility for ventures beyond the traditional creative realm.
2. Funding Options and Models
Consider your funding goals and the options each platform provides. If you prefer an all-or-nothing approach, where you only receive funds upon reaching your goal, Kickstarter is the way to go. Your backers will only be charged at the end of the campaign, and only if the goal is reached.
On the other hand, if you would benefit from partial funding and have a fallback plan, Indiegogo's flexible funding model might be more suitable. Your backers’ card will be charged as soon as they purchase rewards.
3. Fees and Expenses
Compare the fees associated with each platform. Kickstarter charges a 5% platform fee and an additional payment processing fee. Indiegogo has a tiered fee structure based on campaign performance, with a standard platform fee of 5% for successful campaigns. Analyze the fee structure and its impact on your campaign's budget.
Kickstarter Fees:
Kickstarter charges a 5% platform fee on successfully funded campaigns and another 3% + $0.2 per pledge for processing fees, including both the campaign goal and any overfunding.
Payment processing fees are additional and vary by country, typically ranging from 3%-5%.
Indiegogo Fees:
For charitable campaigns, Indiegogo waives the 5% platform fee. A processing fee of 3% + $0.30 will still be charged for third-party credit card fees.
For commercial projects, if you transfer funds raised in US dollars to a bank outside of the US, you will incur a platform fee of 5% + 3-5% of the processing fee, as well as a $25 wire transfer fee.
4. Campaign Flexibility
Consider the level of flexibility you require for your campaign. Kickstarter has stricter guidelines and project approval processes, ensuring a curated selection of projects. If you prefer more control and freedom over your campaign's structure and content, Indiegogo's open approach might be more appealing.
Success Stories: Kickstarter vs Indiegogo
Both Kickstarter and Indiegogo have witnessed numerous success stories. Here are a few notable examples:
Notable Kickstarter Successes
Pebble Time: Pebble Time, a smartwatch with an e-paper display, raised over $20 million on Kickstarter, becoming one of the platform's most successful campaigns.
Exploding Kittens: A card game featuring adorable but explosive felines, Exploding Kittens gained massive popularity and raised nearly $8.8 million on Kickstarter.
Notable Indiegogo Successes
Flow Hive: Flow Hive, an innovative beehive design that simplifies honey extraction, exceeded its funding goal on Indiegogo and went on to become one of the platform's most successful campaigns.
Micro Drone 3.0: Micro Drone 3.0, a palm-sized drone with HD video capabilities, raised over $3.6 million on Indiegogo, showcasing the platform's support for tech innovations.
Conclusion
Choosing the right crowdfunding platform is a critical step in ensuring the success of your project. Kickstarter and Indiegogo have distinct features and advantages that cater to different types of campaigns and creators. By considering factors such as project type, funding options, fees, and campaign flexibility, you can make an informed decision and launch your crowdfunding journey on the platform that best suits your needs.
