Danae Ringelmann: Innovating the Crowdfunding Model
The co-founder and chief development officer for crowdfunding site Indiegogo shares what inspired her idea and what’s in the works next.
Danae Ringelmann remembers growing up and watching her parents, who were small-business owners, struggle to secure a loan. While working on Wall Street after graduating from college, she likewise couldn’t help but notice that the “little guys” were often denied financing, no matter how viable or game-changing their ideas.
Inspired to help anyone realize their dreams, Ringelmann went to work designing the basic concept and infrastructure for what would become Indiegogo, which she co-founded in 2008. Originally designed as a crowdfunding platform, Indiegogo now hosts campaigns in 223 countries and territories worldwide and aims to redefine entrepreneurship by shifting it from a privilege to a right. One difference between Indiegogo and its main competitor, Kickstarter, is that Indiegogo supports entrepreneurs throughout the entire lifecycle of their projects, establishing partnerships and offering assistance not just for funding but also for product design, manufacturing and retail selling.
“We’re entrepreneurs ourselves at Indiegogo, so we know that starting a company or developing an innovative new product can be really hard,” Ringelmann says. “We wanted to democratize funding and allow anyone to have an equal shot at bringing their idea to life. It’s incredibly inspiring to see all of the entrepreneurs on the platform share their stories and see their projects through to fruition.”
Previously, those who used sites like Indiegogo and Kickstarter could receive so-called “perks,” such as T-shirts and coffee mugs, but not a financial stake. But in 2016, the Securities and Exchange Commission changed the regulations to allow crowdfunding investments, meaning anyone can now invest in start-ups through crowdfunding in exchange for a financial stake in the company. Ringelmann and Indiegogo were ready. They launched an equity crowdfunding service in late 2016 in partnership with MicroVentures that aims to democratize investing, allowing supporters to get a piece of the pie. And so far, the equity service appears to be a hit: The first eight campaigns have raised nearly $2 million in a few short months.