Blog 2 – Indiegogo versus Kickstarter
Today, the Roaming Startup Show at roamingstartup.com has a videocast with its two hosts, Bob and Zach, they compared two of the biggest crowd funding platforms on the web. It’s Kickstarter versus Indiegogo and below is a transcript that talks about the differences between Indiegogo.com and Kickstater.com
Great products come from ideas and concepts before they become an actual product. The process of coming up with a product takes time, effort, and more often than not, a lot of money. With Kickstarter, they have this new policy which states a actual working model is needed before you can create a program with them/before you can start raising funds for your project. It seems that it is their way of trying to give a polished and seamless product on time. With this Kickstarter restriction, Indiegogo gets a chance to tap on a population or inventors that have great ideas but need funding to get those ideas into concepts then working models.
Goal's and Payouts
Kickstarter has an administration fee of 5% and a payment processing fee of 3% to 5% which varies on all the money raised. Kickstarter has an all or nothing rule – if your goal is $10,000 and you’ve only raised $7,000 dollars, you don’t get a penny because you didn’t get to your $10,000 goal. Indiegogo on the opposite, charges a 4% fee when you hit your goal and they keep 9% plus 5% if you don’t hit your goal. You keep whatever money you were able to raise with Indiegogo, they just charge you differently depending on whether you hit or missed your target funds.
Kickstarter, at the moment, is only available for US citizens. You need to have a US Tax ID or Social Security Number to start raising your funds on Kickstarter. So if you are the major front of a project and you’re not a citizen of the United States, then it’s an easy decision, you need to go through Indiegogo because they will accept you.
Indiegogo takes almost all major credit cards and Paypal ( HYPERLINK "http://www.paypal.com" www.paypal.com) which a lot of people use world-wide. Kickstarter on the flipside pays out through Amazon ( HYPERLINK "http://www.amazon.com" www.amazon.com) alone. So if you want to get things started with Kickstarter, you need to have an Amazon account that has a verified bank account for you to get your money. Kickstarter gets a kickback from Amazon for using their processing system – they have a good partnership and it allows for a very smooth transaction, so this restriction will not likely change. Indiegogo is your option if you’re someone more comfortable with Paypal.
With Indiegogo, they have a great community base which is much closed knit, wants everybody to succeed and has a common goal of making sure they are better than Kickstarter. Now Kickstarter seems safer and fluid; everything seems flawless (because of their restrictions), they have a bit more of a polished product and they have advisors to help you in the process – it gets picked more often because of these factors.
To sum it all up, Kickstarter do have a lot of restrictions and have specific restrictions mainly because of their quest to give a more polished product and it is very mainstream. So if you want to pay a little extra to have an advisor and make it an easier transition for you, then Kickstarter seems to be the way to go. Indiegogo, on the other hand, is more open and very community based; it has a big resource and in terms of money, it saves you dollars. Which to choose really depends on where you are more comfortable. And as cited by Bob, it also depends where your followers or the people you are expecting backing/funding from are more comfortable with.