Indiegogo's Danae Ringelmann tells TechRepublic how and why she helped start the nascent crowdfunding movement.
One day, an elderly filmmaker spent $15 to mail her a script and ask her to finance his film. Ringelmann's heart sank. Her idealism started to shatter. A man with so much experience needed her desperately, only because she worked at a bank and held the power.
Ringelmann called her mother in tears. "She said to me, 'If you're really pissed off about it, go fix it.' And she hung up."
So she tried to, first from the inside. She organized a fundraising campaign while she was still working to convince investors to fund artists' projects. After months of work and hundreds of volunteer hours outside of her full-time job, the event arrived. Big investors came, and Ringelmann was counting on their checks at the end of the night.
"But they couldn't invest even though they loved it," she said. "They didn't know who I was, I didn't have reputation, and I was on the outside."
She realized in order to change the finance industry, she had to leave it.
The idea was simple. She wanted to put power back into the hands of the people—the average investors that are willing to donate smaller amounts of money—by letting them choose what businesses they wanted to help succeed. She wanted to democratize finance.
In 2007, Ringelmann founded Indiegogo, an international crowdfunding platform, with two of her University of Berkeley Haas School of Business classmates, Slava Rubin and Eric Schell. All three had experiences with failing to fund projects they were passionate about, which is how they bonded so well.
Indiegogo was first open to the independent film industry. By 2009, it had gained so much traction, it expanded to all industries. Today, Indiegogo has launched in four languages and five currencies. There is a 4 percent fee on the money raised if a project reaches its goal, and a 9 percent fee if the goal is not reached. With a valid bank account, anyone can start a campaign or donate to one.
For International Women's Day this year, 400 campaigns raised more than $1.3 million. The projects ranged from a hair clip that doubles as a security device, sounding when the wearer is in danger, to children's books featuring female leads. Empowering female entrepreneurs has become a priority for Ringelmann.
Unlike other crowdfunding platforms that curate content, Indiegogo allows anyone to post their idea. Curating, Ringelmann said, is just another form of gatekeeping to her.
"The last thing we want to do is have our own biases potentially kill the next Google, or prevent the next cancer treatment, or big musician, so we just don't judge upfront," she said.
Indiegogo has become a model of success for other crowdfunding platforms, but it took a while to get to this point.
"You're trying to create an industry, and all the effort you do is all trying to convince people what is possible," she said. "We could see our vision, but it was a lot of back breaking work, and a lot of hustle."
Ringelmann said she has been on the path to solve the inequalities in the finance industry since she was a child. Her parents owned a small brick-and-mortar business, treated their employees well, and bootstrapped the company themselves for more than 30 years.
"I always saw them of being in control of their life, of entrepreneurs being in control and having a family and have an intentional, meaningful life."
Ringelmann's parents provided well for the family, but the business was always slow-growing, always frustrating. Dinner conversations revolved around these topics, especially how the traditional system locked them out, and it was built on relationships, she said.
"It's not out of maliciousness with the VCs or banks—most get in it because they want to say yes and help ideas come to life, but the structure of investing is set up in such a way that it's a gambling decision," she said. "There's no way to know if an idea will survive or have legs, that has pushed investors to rely on biases and what factors performed well in the past."
Her inspiration to start Indiegogo's crowdfunding platform—which has started a crowdsourcing movement around the world—has always been and will continue to be the people using the platform and the ideas they come up with. The best ideas work because they have merit. If they are pitched well, they not only get funded, but they also get marketing validation from the people who believe in them. It creates a level playing field for entrepreneurs.
"We haven't deviated from the reason we started this company. The product has evolved, but the obsession with solving this problem hasn't wavered."
When Ringelmann was present to watch President Obama sign the JOBS Act into law in 2012, she excitedly called her mother again. Though she was proud, Ringelmann said her mother always keeps her in check.
"She said, 'Just make sure you remember why you did this, because you want to make sure that as the industry evolves, it ends up helping the people you wanted to help,'" Ringelmann said. "'You now have a responsibility to stay a leader and keep the integrity of the industry.'"
In her own words…
What is your biggest advice for aspiring tech leaders?
"Don't wait for perfect. I had a tendency to try to be perfect, I loved school, and getting the A was satisfying to me. But you never will be at perfect. Another piece of advice: impact equals scale. A lot of women want to solve a problem. To really solve it in a meaningful way, you need to solve it for a lot of people, and create a meaningful business that scales."
How do you unplug?
"If I don't work out consistently, it's harder to stay in a positive place. I try to sit for a few minutes every now and then, make an effort to clear my mind."
What is your favorite thing to cook?
"I just got a new blender, so I am experimenting with blending recipes. I wish I could say I could cook. I like to experiment."
What do you like to read?
"[In this industry] we can get overexposed to business stuff, so I am practicing right now to keep sources diverse without necessarily having an intention behind that. It's hard because everything wants to be a goal what you're trying to achieve things, but by exposing to different ideas, I just see what appears. I'm a non-linear thinker."
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