Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business Finance

Indiegogo proves success of crowdfunding movement

As crowdfunding becomes a more recognized business funding option, we are watching to see how the field is shaping up, and Indiegogo’s success in 2012 is a clear indicator that it is a viable option for businesses.

indiegogo

indiegogo

Indiegogo raised more money in a shorter period in 2012

If you’re unsure about using crowdsourcing methods to obtain capital for your business, let Indiegogo.com’s success in 2012 serve as an incentive to take the plunge. Campaigns operated through the site raised 20 percent more than those in 2011 and many did so in a shorter period of time. On top of that, more than half were successful in raising the full amount they set out to obtain. These metrics should spur small business owners to take a look at their current capital search strategy and seriously consider implementing crowdfunding efforts.

When it comes to money, it’s understandable for business owners to lean towards sources that are traditional, tried and true. However these funding mainstays are tightening their purse strings as evidenced by the increase in the number of rejected business loan applications. This decrease in available funding isn’t because businesses aren’t worthy, but that banks are becoming more stringent in the amount of money they’re willing to release to entrepreneurs and consumers in general, although business owners are having more luck with smaller lenders. With lower interest rates available for savings and money market accounts, and fees for activities that used to be free, banks are erring on the side of caution rather than risk.

Indiegogo: thinking outside of the box

In the spirit of innovation, business owners should think outside of the box, and supplement traditional loan and bank applications with crowdfunding efforts as well. When you’re fighting to get your business started, sometimes you have to use guerilla marketing tactics and take an unconventional approach to gain visibility and support for your company. All of the contacts you’ve made through networking with industry professionals, friends and peers can result in money raised if you utilize a crowdfunding vehicle to collect donations from the people who are sold on your plan.

The numbers from Indiegogo’s past year show it’s taking shorter amounts of time and fewer people to successfully reach fundraising goals, and that a third of investors are donating without requesting equity within the company (which you don’t see happening very often). Not saying this is a no brainer, but as an entrepreneur, you need to exhaust every option possible to get the capital you need. It’s fine to go the route of a bank – but it doesn’t hurt to increase your chances and generate interest and donations from friends, peers and other contributors.

Advertisement. Scroll to continue reading.

Destiny Bennett is a journalist who has earned double communications' degrees in Journalism and Public Relations, as well as a certification in Business from The University of Texas at Austin. She has written stories for AustinWoman Magazine as well as various University of Texas publications and enjoys the art of telling a story. Her interests include finance, technology, social media...and watching HGTV religiously.

5 Comments

5 Comments

  1. JoeLoomer

    January 6, 2013 at 10:38 am

    must confess I actually had to google “what is crowdfunding” before reading the rest of this post – good for Indiegogo!

    Navy Chief, Navy Pride

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business Finance

Business owners are no strangers to placing bets on their own success, but retirement planning shouldn't be risky.

Tech News

(TECH NEWS) Why is the most funded game in history still in development and has no clear release date? Why crowdfunding as a concept...

Business Finance

(TECH NEWS) Crowdfunding has become ripe for scams, don't be a sucker -- here's how to spot 'em.

Tech News

(TECH NEWS) For an organization founded two dead languages ago, the Catholic Church is surprisingly ahead of the curve, now crowdfunding creatively.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.