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With competition from Kickstarter, Fundable -- Indiegogo brings in record VC round to speed ahead
Crowdfunding has become the new way to see just how strong your idea and you radiance is. Since companies are essentially letting people know about and invest in a prototype or half-baked idea, long before the product is completed, it is also quite a risk. And, while Kickstarter may the most well-known name in crowdfunding,
Indiegogo now has some competitive funding to help catapult its services. With a new Series A round of funding announced today, Indiegogo now can add $15 million to the $1.5 million it raised last year during its seed funding.
This round was led by Insight Venture Partners and Khosla Ventures, with the participation of existing Indiegogo investors Metamorphic Ventures, MHS Capital, ffVenture Capital, and Steve Schoettler.
This round already slingshots the company past Kickstarter in the realm of funding -- Kickstarter raised only $10 million. But the amount of money the companies are working with isn't the only differentiator in the crowdfunding environment that Indiegogo can point to. Indiegogo is open to all projects, worldwide, and allows users to keep funding even if they don’t meet their goals (after paying an additional fee). Kickstarter and others have a 100% or nothing policy so that people investing really get something in return.
Currently, Indiegogo contributors receive thanks and perks from project creators, the company is now considering allowing equity investments under the new U.S. JOBS Act.
Founded in early 2008, Indiegogo has funded more than 100,000 projects in at least 196 countries.
Indiegogo right now runs thanks to around 20 employees and plans to put some of the money toward general business and staff growth -- they already tired five employees this year.
Recent developments in crowdfunding
Just a few weeks ago, a new crowdfunding company jumped on the scene with a greater focus on helping the companies that had a hard time fitting in the VC-funding boxes. Fundable.com, founded and run by Wil Schroter lready has several hundred companies and projects in its pipeline, ready to test their pitches with the public.
And Fundable has several hundred more companies in its pipeline that will be rolling onto the site in coming weeks and months.
Each company is vetted by the Fundable team and sets up a goal amount to raise, reward incentives (if it is looking for consumer funding) and a time which the goal funds must be raised by or else no one is on the hook for the investment.
Schroter explained to me just how much crowdsourcing and the JOBS Act has changed what is possible in product creation.
“Crowdsourcing has changed what an investor can be and the entire context of how products get made,” Schroter. “There are so many people and companies that don’t fit in the boxes of what angels are looking for, but could thrive in the marketplace and we want them to get that opportunity.”
Recently, attention has been drawn to similar models like that of Kickstarter since the Pebble watch gained so many early investors that it was able to pre-sell 85,000 watches in a fraction of the time it gave itself. Now other businesses are interested to see if their ideas are ones that strike a cord with the base they are targeted to.
Crowdsourcing has also changed the term early adopter from those that wait in line to those that order at the prototype level.
The Columbus, OH-based business also credits the JOBS Act as a momentous and serendipitous change just as the company launches.
JOBS Act, also known as the “Crowdfunding Bill,” now allows startup companies to publicly raise money from anyone willing to back them. Essentially, this means startups aren’t going to be relegated to a small number of accredited investors and lenders to raise capital -- anyone can participate in the creation of startup companies.
One of the projects being funded from day one is bikedabs – a concept to create a mold for clipless pedals so that bikers can use their street shoes to bike more efficiently and safely. Schroter points out this company as a prime example of why Fundable is necessary in our marketplace today. This company only need $25,000 to create the mold for its product and wouldn’t be a gangbusters investment for a traditional venture or angel firm, but there are a lot of avid bikers that could be interested in getting that product into stores near them.
With 20 employees, Fundable is spending this year onboarding companies to the site and really diving into how it can help the companies its vets work closely with investors to get more products made.
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