Crowdfunding Company Indiegogo Leads the Pack in Transforming the Global Economy

By Tracey E. Schelmetic January 29, 2014

If there’s one technology trend for this decade that has people scratching their heads, it’s crowdfunding. This method of raising capital for companies, projects and even sports teams using the Internet to accept investments both large and small is increasingly becoming the go-to method of raising cash. Once generally limited to tech companies and new inventions, crowdfunding is showing up everywhere today: two recent films at the Sundance Film Festival were crowdfunded, and the Jamaican bobsled team, headed for the 2014 Winter Olympics in Sochi, Russia, raised some of its funds from crowdfunding.

So why are people scratching their heads?

The method is unique, and the long-term implications are still unknown. While many worthy projects have launched thanks to crowdfunding, any method of raising money will eventually attract crooks, and crowdfunding risks getting its reputation tarnished if too many scams originate in the model. There is also a risk of eventual “donor fatigue” in that too many investors will weary of requests and a lack of returns after exposure to too many projects.

Still, there is evidence that many people are willing to place bets on crowdfunding as a viable method of raising money. The prominent Web site Kickstarter is the world’s largest crowdfunding platform. Since its launch in 2009, the site has seen more than five million people contribute to fund more than 50,000 creative projects of different types. The company is in the process of expanding its reach globally.

Another crowdfunding platform, Indiegogo, has been raising some venture capital as of late (albeit the traditional way). This week, the San Francisco-based company announced that has raised $40 million in funding that will help it expand its global reach and build up its mobile presence. This is the company’s third round of funding and its largest effort to date. It comes on the heels of the success of two Indiegogo-backed films at the Sundance Film Festival, “Dear White People” and “Life Itself.”

According to one of the company’s co-founders, Slava Rubin, the crowdfunding model is becoming more accepted as business as usual.

“If the 80s were about desktops, the 90s were about commerce and the 00s were about social, then the next decade is going to be about crowdsourcing,” Rubin told the UK newspaper The Guardian. Rubin noted that while the company has some 1,000 competitors today, it currently maintains a leadership position. “We bring the crowd to crowdsourcing,” he said.

The model is important because it frees itself of the whims of venture capital firms that are generally looking for large and immediate payback. Crowdfunding investors often offer funds for more daring projects, admiring the vision rather than the high return on investment rates.

According to John Doerr, general partner at KPCB, one of the firms backing Indiegogo, the crowdsourcing model has the potential to transform the global economy.

“We are excited to partner with Indiegogo to help support the dreams and aspirations of the Indiegogo community and continue establishing Indiegogo as the leading international platform for funding new ideas and innovation,” said Doerr. 

Edited by Ryan Sartor

TechZone360 Contributor

Related Articles

Four Reasons to Reach for the Cloud after World Earth Day

By: Special Guest    4/23/2018

The World Earth Day agenda offers a chance to flip the rationale for cloud adoption and highlight environmental benefits that the technology brings pr…

Read More

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More