Perks You Can’t Offer in Your Indiegogo Campaign

Crowdfunding Forbidden Perks

Like most people, when you hear the word “crowdfunding,” you probably think of the heavyweight that is Kickstarter.

The reward-based crowdfunding site has quickly become a mecca for project creators looking to launch the next big thing. And why not; in the past decade, crowdfunding has grown into a multi-billion dollar industry.

Global crowdfunding experienced http://www.marketwired.com/press-release/crowdfunding-market-grows-167-2014-crowdfunding-platforms-raise-162-billion-finds-research-2005299.htm. On Kickstarter alone, more than $1.5 billion has been raised since its launch in 2009.

As with any business venture, the promise of profits attracts some less-than-savoury characters.

Kickstarter (and other crowdfunding platforms) have been plagued with outright scams and products that never get delivered.

To combat this, Kickstarter has banned everything from certain types of rewards (adult toys for example, which are allowed on Indiegogo) to banning the use of photo-realistic renderings to depict hardware projects offered on the platform.

The site also prohibits campaigns that attempt to fundraise for charity or involve prohibited items like as alcohol.

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The Next Best Kickstarter Alternative

Compared to other crowdfunding platforms, Kickstarter can come off as quite strict.

In a bid to get away from these rules, some campaign creators use the next biggest platform, Indiegogo:

With more than $220 million raised in 2014 alone, Indiegogo has also proven itself as having a viable pool of backers.

Some project creators prefer Indiegogo as it:

  • accepts European projects,
  • allows charity fundraising,
  • runs a “flexible funding” model

One cool fact is Indiegogo also allows backers choose multiple perks, leading to even more funding for the creator. On average, Indiegogo generates more revenue on more successful campaigns.

Core Elements for Crowdfunding Success

But despite these differences, successful crowdfunding on Indiegogo requires the same core elements as on Kickstarter.

We’ve spoken about them here, here and here; but without these three, your campaign is likely to fail:

  • Audience Fit: Is your product the right fit for the chosen platform? Kickstarter is open to creative projects, but studies show their audience tends to favor gadgets over things like jewelry.
  • Compelling Video: Is there a compelling story behind your campaign? Crowdfunding campaigns with videos, especially personal ones, raise over 100% more than those without any video.
  • Rewards & Perks – One of the keys to a successful crowdfunding campaign is choosing the right perks to offer. Are your perks & rewards really appealing to the audience? The right perks can sway prospects and ensure you receive funding for your project.

Depending on the project, perks can range from dinner with an Oscar-nominated director, lifetime discounts for their next purchase, advance copies and more.

In the bid to stand out, more project creators are looking for ways to offer even more creative perks to backers.

However, some creators realize (too late) that crowdfunding platforms have very strict rules regarding rewards offered. For example, on Kickstarter, you can’t offer a genetically modified organism as a reward, but on Indiegogo, it seems to fly. But before you launch that campaign, here are seven more things you can’t offer as perks on Indiegogo:

  1. No Alcohol – On Kickstarter, it’s against their T.O.S to offer alcohol as a reward, but on Indiegogo, you can. Well kind of; Indiegogo doesn’t allow you to ‘explicitly’ offer wine, beer or hard liquor as a perk. What you can do is offer backers vouchers for physical delivery or in-store pickup of any alcoholic products.
  2. No Share of Future Profits – The platform sticks to its guns as a rewards-based platform, and thus bans project creators from offering backers a share of future profits. Financial incentives, profit sharing plans, even bullion are not allowed to be offered as perks.
  3. No Lottery Spins – Feeling super generous, and want to offer backers a little more? Using a lucky dip or raffle to choose is off the books on Indiegogo; however the platform allows you run a referral contest. A backer can refer others and you can reward them for THAT. The platform earns more commission, you rake in more funds, and the backer gets an even cooler perk. #everybodywins.
  4. No Promise of Security – Campaign creators are not allowed to offer “security” (as defined by the Securities Act of 1933), in any form. Perks like stocks, security-based swaps or debentures are prohibited.
  5. No Weapons – Raising funds for producing or offering a weapon as a perk, is a no-no on Indiegogo. In November, the makers of the SALT Gun, a non-lethal gun that fired pellets, had their campaign pulled and all contributions refunded. According to Indiegogo, it didn’t comply with their Terms of Use prohibiting offering “weapons, ammunition and related accessories” as perks.
  6. No Drug Paraphernalia – Vaporizers, ‘artistic’ bongs, prescription drugs; anything that can be “to enhance or facilitate the consumption of controlled substances”, are banned from being offered as perks.
  7. No Airline Tickets : While the explicit offering of a plane ticket as a perk is prohibited, campaign creators can offer perks that involve flights provided by authorized airlines. However, this is only allowed if the tickets that have been authorized by the US Department of Transportation.

Do you think these are a strict set of rules?

Maybe, but it helps eliminate campaigns that could be construed as scammy or potentially dangerous. Getting your perks right from the onset, can help you offer even more value to backers, and improve your chances of success.

At Floship, we recommend a thorough reading and understanding of Indiegogo’s T.O.C page here, to be sure that your project qualities.

With your project and perks cleared, how about your delivery?

Consider Floship’s FCLP certification which been used by campaign creators like yourself to successfully ship their finished products to buyers around the world.

Floship Certified Logistics Plan for Indiegogo and Kickstarter

 

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