Motley Fool Money
A Marketplace of Ideas
Sun Jul 16 2023Description
The episode explores the power of crowdfunding, the rise of crowdfunding as a financing option, challenges and regulations in crowdfunding, and emerging trends in the industry. Indiegogo serves as a platform for turning ideas into reality, providing validation for entrepreneurs. Funding challenges have led to different types of companies seeking crowdfunding. Crowdfunding allows companies to test new products with lower risk. However, there are challenges in delivering on promises and timing delays can frustrate backers. Indiegogo aims to be an open platform while moderating to prevent fraud. Film campaigns have evolved with the rise of streaming platforms, focusing on distribution. Cause-driven films and transportation projects like e-bikes have gained traction. Glamping projects offer unique outdoor lodging structures. Indiegogo aims to support entrepreneurs for longer periods and increase backer frequency.
Insights
Crowdfunding provides a sweet spot for turning ideas into reality when traditional VC financing is not yet available.
Indiegogo serves as a platform between ideas, venture capital, and further steps like going public or getting acquired.
Failure in crowdfunding is seen as a learning opportunity and respected in the industry.
Entrepreneurs sometimes face challenges in delivering on their crowdfunding promises, such as unexpected expenses or quality issues.
Film campaigns on Indiegogo have evolved to focus on distribution and cater to a binge-watching audience.
Film campaigns have evolved with the rise of streaming platforms, making distribution a key factor in their success.
Transportation, particularly e-bikes, has become a hot category on Indiegogo due to the high demand and eco-friendly nature of these products.
Transportation, particularly e-bikes, has become a hot category on Indiegogo due to the high demand and eco-friendly nature of these products.
Indiegogo hopes to continue supporting entrepreneurs for longer periods and increase backer frequency by offering more variety and staying involved throughout their journey.
Indiegogo hopes to continue supporting entrepreneurs for longer periods and increase backer frequency by offering more variety and staying involved throughout their journey.
Chapters
- The Power of Crowdfunding
- The Rise of Crowdfunding
- Challenges and Regulations in Crowdfunding
- Emerging Trends in Crowdfunding
The Power of Crowdfunding
00:01 - 06:56
- Indiegogo's ethos is to let the people choose and minimize moderation.
- Crowdfunding has longevity due to its emotional attachment and support from users.
- Indiegogo serves as a platform between ideas, venture capital, and further steps like going public or getting acquired.
- Campaigns on Indiegogo can range from a few hundred dollars to millions of dollars.
- Crowdfunding is a sweet spot for turning ideas into reality when traditional VC financing is not yet available.
- Indiegogo provides validation and proof points for entrepreneurs before seeking other forms of funding.
- Failure in crowdfunding is seen as a learning opportunity and respected in the industry.
- Funding challenges have led to different types of companies seeking crowdfunding.
The Rise of Crowdfunding
06:35 - 13:28
- Funding is harder to get and venture capital has been drying up, leading to a decrease in IPO paths.
- Some people are turning to entrepreneurship due to layoffs and instability in big tech jobs.
- Established companies are exploring crowdfunding as an alternative means of financing.
- Crowdfunding allows companies to test new products with lower risk before investing all their funding into production.
- Indiegogo faces the challenge of balancing the supply and demand of campaigns and backers on their platform.
- The typical backer for crowdfunding campaigns consists of friends and family, loyal Indiegogo users, and those who catch on through word-of-mouth.
- Backing a crowdfunding campaign provides an inside look at the process and progress of the project.
- When a campaign fails or goes sideways, backers may lose their investment if the entrepreneur has already spent the money on materials or production runs.
Challenges and Regulations in Crowdfunding
13:00 - 20:19
- Entrepreneurs sometimes face challenges in delivering on their crowdfunding promises, such as unexpected expenses or quality issues.
- Transparency and open communication with backers is crucial in these situations.
- Timing delays are a common frustration for backers, but repeat backers tend to be more patient.
- Indiegogo originally aimed to offer equity crowdfunding, but regulations led to the development of perks-based crowdfunding instead.
- Perks-based crowdfunding allows creators to offer non-monetary rewards in exchange for support.
- Equity crowdfunding involves investors becoming part owners of a business and potentially receiving returns.
- The rules and regulations around crowdfunding are constantly evolving, with discussions about tests for accredited investors and the inclusion of new types of perks like cryptocurrency or NFTs.
- Indiegogo aims to be an open platform that allows users to choose while also moderating to prevent fraud and protect users.
- Film campaigns have evolved with the rise of streaming platforms, making distribution a key factor in their success.
Emerging Trends in Crowdfunding
19:54 - 26:28
- Film campaigns on Indiegogo have evolved to focus on distribution and cater to a binge-watching audience.
- Cause-driven films that resonate with people tend to be successful in crowdfunding.
- Transportation, particularly e-bikes, has become a hot category on Indiegogo due to the high demand and eco-friendly nature of these products.
- Glamping (glamorous camping) projects have also gained traction on the platform, allowing entrepreneurs to raise funds for unique outdoor lodging structures.
- Entrepreneurs in the glamping category offer backers early bird perks like discounted stays in order to finance the construction of their properties.
- Indiegogo hopes to continue supporting entrepreneurs for longer periods and increase backer frequency by offering more variety and staying involved throughout their journey.