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Danae Ringelmann invented Crowd-Funding
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Danae Ringelmann invented Crowd-Funding
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I'm reading
Danae Ringelmann invented Crowd-Funding
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“When you are your whole self and you allow yourself to be in a role that really calls upon the person that you are, you never feel like you’re working. You feel like you’re just being.”
Conversations
27 March 2014

Danae Ringelmann invented Crowd-Funding

Interview by Dumbo Feather
Photography by Indiegogo

A few years back, really not very many, the term crowd-funding didn’t exist. That quickly changed when, in 2007, three friends got together to try and fix a problem, and in so doing, created a phenomenon. How do you allow a large group of people who really care to financially support their interests? Indiegogo was the solution; an online platform that democratised investment.

Since its creation it has raised over 99 million dollars. It’s been used to get a Tesla Museum built, create a salt-shooting gun that kills flies, finance Who Gives a Crap toilet paper, among 150,000 other campaigns. We spoke Indiegogo co-founder Danae Ringelmann from the other end of a crackley phone line to learn more about supporting game-changers and being one herself.

Behind extraordinary ideas, there are extraordinary people. Dumbo Feather is a magazine about these people.

What motivated you to start Indigogo?

The path to Indigogo for me was really organic. I grew up in San Francisco. My parents were small business owners and they struggled for 30 years to grow their business because never once could they get an outside loan. So I grew up with the awareness of how hard it was to run a business.

After college I went into finance to understand money and business and how it all worked. I went to an event and met a bunch of filmmakers and theatre producers—I thought I was going to a Hollywood Wall Street event, but actually it was the exact opposite. Because I represented a bank, everyone wanted to talk to me. That was the beginning of my awareness of how financing and access to capital extended beyond small businesses.

One of the film makers that I met that night sent me script in the hope that I would finance his film. I got really upset and called my mother and cried on the phone about how unfair the world was. This man, who had a lifetime of experience was begging someone with no experience for money. She had a business to run and she said, “Well if you’re so pissed off about it, go do something.” And then she hung up on me.

How did that feel?

It was a shock, but totally spot on. If I was really upset about something, I should go do something.

What ended up happening was I worked with the people I’d met that night to put on a production of an Arthur Miller play where the goal was to get an audience, actors, to volunteer their time and have someone write a cheque at the end of the night. Everything went perfect except for the last bit, when the investors turned to me and said, “Great job, good luck, we’re not investing.” What was implied was, “We don’t really know who you are.”

It was an experience where I realised that the people who wanted the play to come to life the most—the actors and the audience—didn’t actually have the power to make it happen. They were completely dependent on a third party gatekeeper to determine their fate. I realised I’d started to fail at raising money for things for the same reason my parents failed. I just didn’t know the right people.

The traditional structure was locking them out.

That’s when I started working on my original idea, which was to put the power back into the hands of the people—the fans, the supporters, the customers—to decide what should get funded. We removed the gatekeeper in the process. I came up with an offline idea and when I returned to business school with this idea, I met my co-founder Eric, who had been struggling himself raising money for a theatre company. We then brought in our third co-founder Slava, who also had been struggling with raising money for cancer research. His Dad had died of cancer. Immediately, when they understood what I wanted to do, they got excited and then asked, “Why don’t you use the internet? If you want to democratise anything—it’s the most democratic tool out there.” That’s when I said, “You can’t invest online, it’s illegal.” But we worked out that there was another way to make it happen.

That’s when we tried to navigate the US equity laws and see if we could automate the exemptions and all that stuff, but it got really complicated and was gonna cost us a lot of legal fees. So we decided not to try and change the law and prove social fundraising all at once. We decided just to prove this concept of using the internet more efficiently to raise money and grow your audience at the same time. We thought, We’ll do that first and then revisit the investment.

So that’s when we started Indigogo. We invented the perks concept. We thought, we’ll if people are gonna fund something, they should get something in return, even if it’s not profit. We said, lets give it a try, and low and behold, that idea has kind of stuck. And it’s iterated over time.

So you were actually the first to develop this idea of crowdfunding?

Yes.

That’s pretty amazing. How does it feel to have completely revolutionised the way that people are able to fund their projects and get things that matter to them done?

Absolutely amazing. I wake up every morning not feeling any misalignment. I totally believe in what we’re doing, I totally believe in the way we’re approaching it too. The one thing that people haven’t followed yet is our open approach. It’s just something we’ve believed since the beginning and now it makes us unique.

To truly be an empowerment platform, where we remove the gatekeepers, you have to have a system where anybody can create a campaign. We don’t curate. We don’t judge.

Most other platforms that have popped up do judge. What makes me really proud is that we’ve stuck to our philosophy. It’s really starting to pay off.

What the most exciting project you’ve seen come out of Indigogo?

That’s like asking a parent who’s their favourite child [laughs].

[Laughs].

It’s not fair! All kinds of ideas are coming to life—one’s we never could have predicated. Because we don’t curate, they fall across a really broad spectrum. Everything from cool entrepreneurial campaigns, like LED lights, to creative projects, like last week we had International Women’s week. We had campaigns which raised over $1.4 million, all for either artists or entrepreneurs or causes that support women. One woman created a children’s book called Madame President. Then you have total cause-related ideas that show when the community is empowered, they can really come together and make something happen.

An example that came out of Australia is the community who did not want a big Macdonalds to be built in their neighbourhood. They petitioned, but everyone ignored them, so they went on Indigogo to raise money to take the petition to headquarters. Their goal was $2000, they ended up raising over $40,000. Which was clearly a sign that the community did not want Macdonalds to be there. They used the extra money to hire a filmmaker to come with them, to document their trip to Chicago, which turned it into a bigger story, which helped them garner press, which then put the pressure on Macdonalds to actually do the right thing. So it all parlayed into this huge movement just because we gave the community the ability to organise and vote with their dollar.

So all of these projects are people putting out there the things that really matter to them. What really matters to you?

I have so many ideas. It would probably be around entrepreneurship education for young girls. The only reason I think I was able to start a company was because I had parents that told me I could from a very young age. Whenever school wasn’t teaching me how to do it. I just think we don’t have enough encouragement in society for young girls to discover the entrepreneurial side of themselves, but I do think it’s there. We do nothing to nourish that. I’d want to do something in that vein. I also might do something around… dogs.

Dogs?

[Laughs]. I just love my dog. He’s an 11-year-old mutt. I got him at the RSPCA. He’s part shitzu, part something, I don’t know. He’s a loveable little guy. He got sick last year and I had to spend a lot of money. It made me realise that so many people don’t have this money. Love is priceless.

You tweeted that, “The impact of being yourself is endless.” How has that manifested in your own life?

What I meant by that comment was… I worked in a career for a while were I had to wear a uniform. There was a certain structure. That’s fine. But I’m actually doing a lot of work right now for our company, to identify the values and beliefs which will allow us to democratise finance, and then to make sure that the people we have here embody those values and beliefs authentically, because I think the more aligned our people are, the more successful we’ll be and the more successful our people will be. So what I meant by that tweet was, when you are your whole self, when you are your whole self, when you know what drives you and you embrace your values, and you accept your strengths and your weaknesses, and you allow yourself to be in a role that really calls upon the person that you are, you never feel like you’re working. You feel like you’re just being. What results is amazing for yourself and the company, and you feel good in it. The sky is the limit as to what you can accomplish.

I see so many people struggling in their work because their adhering to some construct of who they think they need to be and spend so much energy trying to change themselves, whereas if they could just accept themselves and find work which encourages them to be themselves more…

But do you think there are enough companies around that actually nourish that sense of self in people?

I think individuals have to nourish that in themselves. For example, I have a friend who works in investment banking. He’s incredibly successful. Why? He’s an incredibly competitive person, he loves the intellectual stimulation. A lot of people hate it, because that’s not who they are.

There’s no right or wrong culture, there’s no good or bad culture, there’s only strong cultures or weak cultures. Strong cultures are ones which make sure they have the right people who exhibit those values and behaviours, and they are aligned. It’s the weak cultures where maybe you need to be super competitive and market-share oriented, but you’re full of people who care more about innovation and learning. That’s just not gonna work.

Maybe you’re a company that needs to innovate every day, like Indigogo. We fail every day. If we were full of people who were just trying to beat out the person sitting next to them, we would fail as a company. We need people that naturally want to innovate, are curious and are happy to fail.

On that note, what does success for Indigogo look like to you?

Success is a world were access to capital is totally democratised. Which means anywhere you are, you can fund whatever matters to you. And that the only thing standing in your way is yourself.

I want more things that inspire me to...

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