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Q&A With Indiegogo’s Slava Rubin About Helping Entrepreneurs Raise $1.5B
This post was originally produced for Forbes.
Crowdfunding is no longer a novelty. It is part of the fabric of the global economy. Within that fabric, one of the brightly colored threads is Indiegogo, having helped entrepreneurs to raise over $1.5 billion.
As I’ve followed the company and its work over the years, I’ve had some favorite social impact projects. One stands out: Solar Roadways. Scott and Julie Brusaw of Sandpoint, Idaho—as small and remote a town as you might imagine—came up with the idea to make solar panels rugged enough to drive on, while incorporating a variety of features like snow melting and LED lighting that would allow an operator to change traffic patterns. The idea was too novel (read, crazy) for any traditional investor, the sort of person the Brusaws had likely never met, anyway. So, in 2014, they launched a campaign on Indiegogo and raised $2,284,774. Today, the solar panels are in production.
Indiegogo has created a platform for entrepreneurs of all stripes—including social entrepreneurs like the Brusaws—to fund projects that would likely have been funded in no other way. Not everyone who tries to raise money is successful. Not everyone who raises money is successful at accomplishing what they set out to do. Still, the entrepreneurial ecosystem has been forever changed by Indiegogo and crowdfunding.
Scott McIntyre, president of the Crowdfunding Professional Association and managing director of COventures.US, says Indigogo is “literally providing a platform for entrepreneurs and supporters to meet and explore opportunities. They’ve also added equity funding and a marketplace for products and services.” He adds, that his personal experience demonstrates the difficulty of successfully raising money on the platform. [Disclosure: I am also a member of the Crowdfunding Professional Association board.]
Sara Hanks, CEO of CrowdCheck works with the joint venture formed by Indiegogo and Microventures for equity crowdfunding. “Quite a few of the companies that we work with choose to post their offerings on Indiegogo/Microventures. We’re happy with that because of both parts of the joint venture are experienced and ethical and know what they are doing. They are an important part of the ecosystem for early-stage funding.”
Recently, I connected with Slava Rubin, the company’s co-founder and chief business officer. What follows is a lightly edited transcript of our conversation—which you can watch in the video player at the top of the article.
Slava Rubin CREDIT: INDIEGOGO
Devin Thorpe: Indiegogo is a giant among the crowdfunding sites on the web today. Where did the idea come from? How did this start?
Slava Rubin: It goes back a while. My two co-founders and I came up with the idea in 2006 in the fall and then we researched it and came up with the actual build and launched in January 2008. So, we’re now just over a decade old and we’re proud of the fact we’re still around and have distributed well over $1.5 billion around the world to virtually every country that’s out there, supporting hundreds of thousands of entrepreneurs—and nearly 10 million backers have participated.
DT: It’s a remarkable thing and it’s part of a broader movement. What do you think it says about people in the world that this works?
SR: Historically, it was just large entities that had centralized power that got to decide what actually got funded or was made. It is truly great to see that using the Internet and things like Indiegogo you’re able to move the power to the people and have them help influence what actually gets funded and what gets created.
DT: It is an interesting landscape these days. GoFundMe has been hugely successful as well with a different if you will brand of crowdfunding. In fact, I think you sold some assets to go fund me, didn’t you?
SR: Well we actually sold it to somebody else. They ended up selling themselves to GoFundMe.
DT: Sorry I missed a step. What do you make of this landscape and how people are choosing sites?
SR: crowdfunding is really just the big idea now and there are different flavors of it. Indiegogo really focuses on the entrepreneurs and we try to support them to bring their ideas to life. We’re really helping them find their customers. Their first promotion, their first backers and then supporting them throughout the process as they continue to get bigger and get more validation. So, there are other flavors of crowdfunding some more personal cause type that I as you mentioned with GoFundMe. We’re really focused on helping entrepreneurs’ dreams become a reality and have the millions of backers using Indiegogo to help influence and to get early access on the most amazing new things out there in the world.
DT: A lot of the work that you do has social impact. I think you and Danae [Ringelmann] and the rest kind of came at this with that mentality not just to make money but do some good in the world. How does that frame your decision making today?
SR: Our theory was that there’s a lot of people that are trying to do incredible things they’re just not getting approved for the funding because of the gatekeeper, the banker, the VC or the grant institution getting to make the decision. We felt if we push that power to the people that they would see more reasons to fund certain things that have a positive impact on the world. Not just show clear profitability.
So that’s exactly the results we’ve seen. There have been hundreds of thousands of entrepreneurs that have been funded on Indiegogo. Many of them would be what you classify as social impact. They’re both having a positive impact on a profit bottom line but also positive impact on the world. So, there are lots of examples of that and that we’re super excited to be able to support those types of projects.
DT: You’ve done some work in the equity crowdfunding space regulation’s C.F. What’s your take on that landscape?
SR: That goes all the way back to when we were founded. We actually wanted to start out with offering equity investments right away. We really brushed up against the rules and the laws going back to the Securities Act of 1933. So, we had to find out a creative way to get around that. That’s how we came up with the perks model which is really about preorders and such. We then worked for President Obama’s administration in 2012 to pass the Jobs Act. It took four years before it was finally able to go live in the United States and in 2016 we launch an equity crowdfunding offering. Since then it’s been exciting.
The limitations on regulation equity crowdfunding have stopped significant growth because, for example, you currently have [a limit of] up to one million dollars raised per entity.
What we’re seeing now is more of this blockchain supported funding. Today, we announced our expansion into security tokens where we actually have a blue-chip Hotel which is the St. Regis in Aspen which has tapped us as their marketing partner to promote the investment opportunity to our audience and that will be a token that is a security token.
DT: What do the security token holders in that offering get?
SR: They’re getting instead of paper shares they’re getting digitized tokens and they’re getting an opportunity to participate in the upside of the actual resort.
DT: Does it represent ownership or a bond interest or a royalty right?
SR: It’s not actually voting rights or anything like that but you do have a financial interest as it appreciates–your piece of the resort.
DT: Slava, what are you most proud of having accomplished?
SR: I would just simplify it to creating Indiegogo; it is really a remarkable thing. My cofounders and I, we are so happy that we all got to create something that the world uses with all of its creativity. And the fact that we have created a sustainable company that has employed so many awesome people.
Beyond that, I’m proud of the fact that I’m married with two kids and they’re pretty awesome.
DT: What is the most important lesson you’ve learned?
SR: So many lessons. Probably one of the most important is you need to learn on your own and not just trust what other people tell you, “This is the way it’s going to be.” Sometimes there is these concepts of reality that are not true, and you just need to test it on your own to find out what is the real feedback.
Then, also just a lot of people are afraid to take risks and often risk will end up with failure. But I find that failure or success are both good results. A lack of decision is really the enemy. So, a lack of decision often is a decision. Knowing the feedback and finding out that it was a poor decision or a good decision is a great result either way. So, I would say keep on taking action to step forward and learn from every step along the way. And don’t be afraid of failure, rather look at failure as a learning opportunity.
DT: You could have done anything when you launched Indiegogo. What intrigued you about this that made you want to do it?
SR: I’ve always been entrepreneurial since I was younger, and I just thought this was such a big idea democratizing access to funding. I don’t want to put it on the same level of–let’s call it–food, shelter or water. But being able to have access to capital is really something that can empower society and it just felt like the right time with the democratization of so many things from the internet; capital was still all about the gatekeeper.
Statue of Liberty CREDIT: DEPOSITPHOTOS
My two co-founders Eric [Schell] and Danae are both awesome and I thought they would be great to work with. And it just felt like a big idea to try to tackle and actually it was a big idea since, clearly, we’re into it over a decade now and it’s far from solved. It’s the onion just keeps on getting peeled back and there’s so many more opportunities and challenges and that’s what’s fun because the learning curve stays steep and there’s a lot of people to still help. And there’s a lot of things to still figure out.
DT: Slava, what is your superpower?
SR: My superpower. That’s an interesting question.
I would say it is being optimistic–trying to believe that anything is possible as long as you just continue to take steps forward and learn.
And maybe storytelling.
And one of the campaigns that we’re most excited about right now—and this is really personal to me because I’m an immigrant from Belarus. I came in 1979 when I was a little kid. We’re really proud of the Statue of Liberty Campaign that we have right now, which just ended recently. The Statue of Liberty [US National Park Service] is actually creating a new museum on the island which is super exciting. We were able to get well over a thousand backers to contribute towards this momentous campaign. It’s just a symbol of the world the symbol I think even for Indiegogo of the idea of democratizing access. America is that. The Statue of Liberty is that. Indiegogo is that. So, it’s really full circle for me. It’s such a personal story in terms of the immigration story and we’re excited about that campaign.
Clarification: the fifth paragraph has been updated to clarify the relationship between CrowdCheck and Indiegogo.
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