Danae Ringelmann, Founder & Chief Development Officer of Indiegogo
How Danae Ringelmann and Indiegogo Helped Start a Funding Revolution
You can fund your baby on the Internet. That’s the world we live in. One in which a couple who wanted a child but could not conceive naturally were able to turn to strangers on the web to raise money for in vitro fertilization. A new life, crowdfunded.
The couple’s campaign for a bundle of joy might seem odd — it’s certainly not ordinary — but it is a triumph of technology and humanity. It’s a story made possible through crowdfunding, a method of raising money for ideas online by seeking small contributions from a large numbers of backers, who usually receive rewards in return for their support. The couple in question acquired funds to conceive their child by running a crowdfunding campaign on Indiegogo, which, along with the New York-based Kickstarter, is one of the world’s preeminent crowdfunding platforms.
Danae Ringelmann often recounts the couple’s story, because it conveys the extraordinary potential of crowdfunding. Few ideas lie outside the bounds of what can be funded (within the law, that is) — you just need to convince people that an idea has merit. Crowdfunding gives ordinary people, including beginning entrepreneurs, a door to financial backing that once stood closed to all but the well connected.
Ringelmann, who cofounded Indiegogo, says that the platform’s users have funded “ideas from businesses to urban gardens to schools to medical cures to babies to films and music tours to you name it.”
She has firsthand knowledge of how to succeed with crowdfunding, but also an even more unique insight into the development of Indiegogo and the very advent of crowdfunding itself.
Indiegogo’s first bricks were laid when Ringelmann was a child. Her parents owned a small business in San Francisco but struggled because they were unable to get a loan. No bank would lend money to the company unless Ringlemann’s mother and father personally guaranteed everything. As their daughter grew up and began to understand the problem, she became frustrated.
Ringelmann chose a career in finance because she wanted to truly understand how money works, and why it was so hard for people like her parents to access the capital they needed. She got a job at JPMorgan Chase and worked with a few filmmakers on the side, hoping to help them raise money for their projects. “In the process of doing that, I actually started to fail for the same reasons that my parents failed,” she says. “They just didn’t know the right people.”
A year into working at JPMorgan, Ringelmann received an invitation to an event called Where Hollywood Meets Wall Street, at which she hoped to discover how kingmakers in finance and film closed funding deals. “When I arrived, the exact opposite was there,” she says. “It was not a sea of power brokers of Hollywood or Wall Street. It was a sea of emerging artists, all hoping to meet their next angel.” Ringelmann proved popular because she was a banker. In the eyes of artists desperate for funding, she had wings.
The event ended, two days passed, and a FedEx package dropped into her life. An elderly filmmaker mailed her a script he had written, along with a note: “It was wonderful to meet you, Danae. I look forward to you financing my next film.” Ringelmann noticed how much the man had spent to send the parcel, and it pierced her.
“Here was a man with a lifetime of experience,” Ringelmann says, “who was begging me — someone with no experience — for money, simply because I worked at a bank.” It saddened her because, in truth, she could do nothing to help him. “Finance was truly messed up.”
Soon after, on the phone with her mother, a distraught Ringelmann lamented the state of affairs. She recalls her mother saying, “Well, if you’re that pissed off about it, go do something about it.”
That, she says, was the trigger.
Working with some of the theater people she met at the event, Ringelmann helped produce a one-night performance in New York City of an Arthur Miller play about racial profiling. The goal, with activists volunteering their time to make it happen, was to pack the house and invite investors who would watch the show, be impressed, and write checks to enable full-blown production.
“Everything went perfectly,” Ringelmann says, “except the last moment, when [the investors] turned to me and they said, ‘Thanks, that was great. Good luck. We’re not investing.’” It still wasn’t the right fit of resources and interest, and she failed.
“It was the elderly man and my parents who taught me that finance was broken,” she says. “But it was this experience that showed me how it was broken, and the way it was broken was that the people who wanted an idea to come to life the most — in this case, the actors and the audience — they didn’t actually have the power or the mechanism to make it happen.”
That’s when Ringelmann resolved to create the mechanism. She left finance and entered business school in 2006 to work on her idea, which at the time involved offline funding with a democratic twist. It was there that she met Eric Schell and Slava Rubin, who had both struggled to raise funds for ventures in the past, Schell for a Chicago theater company and Rubin for cancer research. The two joined Ringelmann, rounding out Indiegogo’s cofounding team. “They were excited about what I was trying to do in democratizing finance,” Ringelmann says. “But they quickly asked, ‘Why aren’t you using the Internet, the most democratic tool out there?’”
United States law at the time prohibited people from investing online, so the Indiegogo trio chose to focus on showing that the Internet could effectively connect passionate people to raise money for penniless projects. That meant adopting a rewards-based model, rather than the equity-based model typical of traditional finance. In January 2008, the team launched their beta site, targeting the film community as their first market. Ringelmann says that they got their first customers one by one, approaching classmates at business school and asking, “Who knows a filmmaker who needs money?”
Since then, 275,000 campaigns — successes and failures alike, in every niche you can imagine — have run on Indiegogo. Other crowdfunding platforms like ArtistShare were around before, but Indiegogo and Kickstarter brought crowdfunding to the mainstream.
Ringelmann has led Indiegogo’s growth. She has also watched it grow, and watched as hundreds of thousands of campaigns on the platform have succeeded or failed. She knows what works.
“What makes an idea and a campaign successful on Indiegogo is, one, it truly connects with an audience,” she says. “Speak from the heart about what you’re doing and why you’re doing it and why you’re the right person to be doing it.” Be yourself.
A great pitch is authentic, personal, and honest. To connect with an audience, you should be specific about your funding target. What exactly will the money go toward? Why do you need the amount you’re asking for? These are questions that any crowdfunding campaign should be able to answer.
Make a Video
If you want to crowdfund an idea, Danae Ringelmann highly recommends a video to pitch to your audience.
“On our site, campaigns with videos raise an average of 115 percent more than campaigns without.”
Being authentic doesn’t mean begging. “The biggest mistake I see people make is that, in raising money on Indiegogo, they ask for money,” Ringelmann says. People beg, and that doesn’t work. “That’s not what Indiegogo is about. Indiegogo is about bringing people together to ideate and create together, to make things happen together.”
Crowdfunding isn’t a handout. It’s a way to energize projects, flipping the switch from idea to reality, and making the world a better place. Unique rewards for backers help build a sense of collaboration and move the dynamic away from asking for charity.
Part of that is also just making sure you have an idea that the world actually wants, Ringelmann says. Some entrepreneurs use crowdfunding to test their idea, to see if there is really market demand. Quite simply, if your project doesn’t interest people, then it won’t get funded. No tips or tricks can change that.
But that doesn’t mean good ideas easily find funding. Ringelmann recalls advice from her dad that’s applicable to all of entrepreneurship, and even life in general: “Whenever you’re trying to do something new in this world, if you’re trying to create any kind of meaningful change, especially change that you know will help the world, you have to expect resistance.”
In the early days of Indiegogo, Ringelmann and fellow cofounders Schell and Rubin fought hard to beat that resistance. “People were laughing at us,” she says. “People were saying, ‘It will never work,’ to the point where, when you hear it enough, you then start to question yourself and question your thinking and ideas and vision.”
Ninety-two venture capitalists refused to fund the platform. Only one said yes.
The right tactics will help you overcome resistance, but they’re useless without the right mindset. “Resistance comes in the form of ridicule. It comes in the form of rejection. It comes in the form of self-doubt,” Ringelmann says. “It’s your job to keep going.”
And keep going the team did. They built Indiegogo and advanced the cause of crowdfunding. “Our goal is to democratize access to capital,” Ringelmann says, and she believes it. “The future of funding is all of us funding the future.”
That future, and an entirely new form of finance, wouldn’t have been possible without the persistence of Ringelmann, her team, and other early crowdfunding advocates.
“What I saw were ideas going unborn every day, not for lack of heart and hustle but simply for lack of access to the right gatekeeper,” she says. People would conceive ideas but never have the chance to bring them into the world. Now, with crowdfunding, it’s possible. You can fund your baby on the Internet.
- How crowdfunding started, and how Danae conceptulized the idea of democratizing finance
- What it takes to disrupt an industry
- Gold advice on crowdfunding and how to get your campaign fully funded
- What Danae believes it takes to build a successful business
- Tips on bootstrapping
Full Transcript of the Podcast with Danae Ringelmann
Nathan: Hey, guys, welcome to the Foundr Podcast. My name is Nathan Chan and I’m your host. By the time you’re listening to this interview, it will have almost been New Year’s. I just want to wish you all a happy New Year and let’s make 2015 the best year yet.
If there’s one thing that I would ask you to do is set some goals. I think it’s so important to set goals because if you don’t set goals for the year, how do you know what to strive towards? How do you know what targets you want to hit? And it’s so important to write them down. I’ll just share with you quickly one way that I set goals is I set my goals for the year. I use a goal pyramid, so I have our biggest goal at the top of the pyramid. And then to get to that top goal, there’s gonna be sub-goals underneath it. I find this process to be really powerful and I have these goals next to my bed. And every morning when I wake up, I look at them and I see how I’m tracking.
Another cool little trick that I’d like to share with you that I’d highly recommend is write a letter to your future self using futureme.org. Send it to yourself one year from now. I promise you, knowing that that email is gonna come to you one year from now with your goals, and you actually write as if these are the things that you have achieved, and just knowing that email is gonna come, it just changes the dynamic. It’s really, really powerful so I highly recommend it.
So, that brings me to today’s guest, Danae Ringelmann. Now, this person is somebody that’s democratized finance. I’m sure you would have heard of crowdfunding, I’m sure you would have heard of Indiegogo. Danae was the person that actually invented crowdfunding. She was the person that was so frustrated that the only way that you could get funding was from a bank or an investor. So, she set out to change that and that’s what she’s done. So, it’s a really, really interesting story. She also shares some really interesting insights around what it takes to build a successful crowdfunding campaign. So, if you are interested in doing a crowdfunding campaign, you’ll get a lot of gold from this interview. But I think you’ll just find a lot of value fit from the story, you know, because that’s what Foundr is all about as well. You know, I want people to learn but at the same time, it’s great to hear the person that’s behind the brand and how it started for them.
So, that’s enough from me. If you’re enjoying this podcast, please make sure you leave us a review. Make sure you subscribe and also check out the magazine. To do that, just simply go to our website, foundrmag.com. So, that’s it from me, guys. Let’s just jump into the show. I hope you have a great rest of your 2014.
Thank you for taking the time to speak with me. So, can you tell us, how did you get your job?
Danae: I created it.
Nathan: So, can you run us through that? How did it all start?
Danae: So, the whole point was not necessarily to create a job, the point was to create some change. So, I started Indiegogo because I had personally been affected by a very massive problem. That in my early twenties, I started to realize it was not just impacting myself and my family, and the people I cared about but actually everyone across the world. And that problem was inefficient access to capital. What I saw were ideas going unborn everyday, not for lack of heart and hassle, but simply for lack of access to the right gatekeeper, the right person that holds the purse strings to make an idea happen. I was surrounded by this as a child. My parents are small business owners in San Francisco. And it was a brick and mortar business that they ran but they could never really get their growth off the ground because they couldn’t get a loan. No bank would ever lend to them without making them personally guarantee everything.
And then as I grew up, I went into finance to really understand money and see why it was so hard. And I worked at JPMorgan but while working there, I actually got pulled into working with some filmmakers and theater producers on the side, helping them raise money for their independent projects. And in the process of doing that, I actually started to fail for the same reasons that my parents failed. I just didn’t know the right people that could cut the check and make the pain go away, and make the idea happen. So, kind of a culminating moment for me was, well, a couple activities, subsequent events happened.
The first was I was, I think, a year into JPMorgan. And I got invited to this event called Where Hollywood Meets Wall Street. And the event I thought was gonna be an opportunity to get out of the office because like a word…I could justify it to my boss because the word Wall Street was in the title. But really what I was hoping for was the opportunity to really be a fly on the wall and kinda listen and observe, and see what is it, you know, how do power brokers of Hollywood talk to power brokers of Wall Street? What are those conversations really like? And when I arrived the exact opposite was there. It was not a sea of, you know, power brokers of Hollywood or Wall Street. It was really a sea of emerging artists all hoping to meet their next angel. And because I was one of maybe a handful of folks from a bank, I was clearly one of the more popular people at the event. It’s not the fly on the wall experience that I was expecting and I’d hope for.
So, as an introvert it made me incredibly uncomfortable. But it was that, through that discomfort that I actually started to see something. And what that something was, was that finance was truly messed up. It was two days later though that it all came to clarity when I received a script from one of the elderly filmmakers who had written a note that said, “It was wonderful to meet you, Danae. I look forward to you financing my next film.” And all I remember noticing was how much money he had spent on FedExing his package, and how sad that made me feel at that moment that I could do nothing. And really what it was is that, here was a man of a lifetime of experience who was begging me, someone with no experience for money simply because I worked at a bank. And so that is what kind of was that the catalyst. I got on the phone with my mom, I was all upset. And after kind of 20 minutes of ranting, she said, well, you know, she was busy running her business, so she didn’t have a lot of patience. But she said, “Well, if you got pissed off about it, go do something about it.”
So, essentially, that’s what started me to work with some of the filmmakers and theater producers I had met that night. I went on to help produce a one night event of an Arthur Miller play in New York City, a play about racial profiling and this is right after September 11, so that was a very hot topic. And the goal of the night was to pack a house with an audience, the actors volunteered their time. And then have investors there to witness the whole night such that they’d be impressed and they’d write a check, and we’d turn into full-blown production. Everything went perfect and except the last moment when they turned to me and they said, “Thanks, that was great. Good luck. We’re not investing.” And it was essentially, you know, I didn’t have the track record of a Broadway producer. I didn’t know the right people and they weren’t the right investors. And the whole event failed simply because I couldn’t connect the right investors to the opportunity.
So, I realized at that moment too that the, you know, it was the elderly man and my parents who kind of taught me that finance was broken. But it was this experience that showed me how it was broken. And the way it was broken is that the people who wanted an idea to come to life the most, which in this case were the actors and the audience, they didn’t actually have the power or mechanism to make it happen. And that they were completely dependent on a third party gatekeeper for their idea to come through.
So, that’s what I wanted to go fix, so it took me a while. I came up with my original idea which is more of an offline fund idea with a democratic twist. I went back to business school to start the company. And it was at business school that in pitching it to everyone I knew, that I actually met my first co-founder, Eric, who himself in a parallel life before I met him had been struggling with fundraising, helping a theater company in Chicago get off the ground. And he brought in our third co-founder, Slava, who also in a parallel life had been struggling with fundraising, raising money for cancer research because his father had died of cancer when he was a young boy.
And so together when they heard my idea, the two of them themselves were from technology backgrounds. And so they quickly asked me, you know, they were excited about what I was trying to do in democratizing finance. But they quickly asked, you know, “Why aren’t you using the internet, the most democratic tool out there? Why are you doing this offline?” And so, I thought it was a great question but I informed them about the SCC laws at the time which was America’s Securities Laws that prevented people from investing online which was the original idea. But I said it’s probably time to change the law because the laws were written in a time when technology didn’t exist. The internet didn’t exist. The only way to protect people from risk was to not allow them to engage at all. But with technology, you could actually limit what people can expose themselves to.
So, we tried to navigate the laws a little bit, see if there’s an exemption that we can automate. All that became increasingly complicated and we realized that we were trying to do two wholeheartedly innovative things. One, prove that the internet is a great way to, in a more efficient and robust manner, raise money. And two, change the law. So, what we get is we put the law change aside for a second and try to not blow the ocean in doing both. And instead focused on proving that the internet is a robust mechanism to help people connect with other like-minded individuals, and raise money for what they’re passionate about.
The end of 2006, we committed to each other. We started working on January 2007. By January 2008, we had a Beta built, online site built, and we launched it to the film community which was gonna be our first target market with the goal of opening up later. And it’s kind of been history ever since. We’re now, I guess, the oldest but largest online funding platform in the world. And we’re serving every country, every industry, ideas from businesses to urban gardens, to schools, to medical cures, to babies, to films and music tours, to, you name it it’s being funded on Indiegogo all across the world.
Nathan: Wow, that’s an amazing story. There’s a lot there I’d like to unpack. The first is, what do you think it takes to have and develop a good idea? What are the core elements? Because you would see ideas, more ideas than most.
Danae: What Indiegogo is doing and in creating this democratic platform where all ideas are welcome, and all ideas thrive based on their own merit versus what an individual or two think about the idea, whether that idea deserves to exist or not, is this element of authenticity. When people are creating a campaign on Indiegogo, they have to bring their whole self to Indiegogo, not just what the idea is but who they are, why it’s important, the whole shebang. And so what makes an idea and a campaign successful on Indiegogo is one that truly connects with an audience.
And so, the keys to success there then are, A, be yourself. Don’t put on the metaphorically uniform to try to impress an investor. But put on yourself, you know, and be you. And speak from the heart about what you’re doing but also why you’re doing it, and why you’re the right person to be doing it, and why you’re so passionate about it. So, the way that manifest is through a great pitch. A great pitch is one that’s incredibly authentic and personal. It includes everything from the video that we note on our site that campaigns with videos raise on average 115% more than campaigns without. And so in that video, we encourage you to put yourself in it and talk again about the what, the why, and the who, and the how. And then it also includes specificity around your funding target, what you’re trying to do, what’s your next milestone. You do not need to raise 100% of your budget all at once. But specificity and transparency around what you’re raising the money for, how the money is gonna actually get you to your next milestone or threshold is really important. Having unique perks that speak to your campaign, that showcase who you are, that are interesting for your specific audience, those always go a long way. So, the first part about being successful is, again, having a great campaign which involves being you and personal, and authentic.
The second key is making sure you’re proactive. So, Indiegogo is an engine or this platform that the more you put in the more you get out, the more we amplify and help you. So, if you put, you know, zero in, we amplify zero which is nothing. But if you put in a lot of effort and grab that engine then our application tools help you expand your reach, gain exposure, and reach more people than you ever could alone. And part of revving that engine is doing updates. It’s also using language like inviting people in.
The biggest mistake I see people make is that in raising money in Indiegogo they ask for money. I know that sounds a little counter-intuitive but a lot of people think that this is a place to beg. If you come on Indiegogo and you beg, you will not be successful because that’s not what Indiegogo is about. Indiegogo is about bringing people together to ideate and create together, to make things happen together. We even say do anything together. So, it’s all about activation and involvement, not asking out of guilt, and that is the fundamental difference. That’s why I think nonprofits have such an interesting experience on Indiegogo because it kinda breaks them from their mold and habits of asking for money. And instead turns them into kind of leaders and project creators and ideators instead, you know, movement leaders if you want to call it. Where their job is to activate an audience and activate a group of people to, you know, shape the world around them and link them into their lives.
The third element of success is just making sure you have an idea that the world actually wants. So, a lot of people actually use Indiegogo as a way to test their idea. Maybe they’ve got some cool concept for, you know, a better Q-tip which actually we do have a campaign doing it called the O-tip. But it’s a great way to test to see if this idea has legs. Do people really want this? Clearly, this one people do. It’s raised I think $78,000 on a $30,000 goal. But it’s a great way to test to see if there is an audience, an appetite for what you’re trying to create. And if there isn’t one then it’s actually great feedback that it’s an idea that the world doesn’t want. And maybe you should take your time and energy, and money, and move to the next idea in life and work on that. And so we actually get a lot of people who are very thankful for Indiegogo because we are a great way to test an idea and they learned very quickly that their idea didn’t have legs.
Nathan: And where do you see the future of crowdfunding going?
Danae: Future, I like to say the future of funding is all of us funding the future. Our goal is to democratize access to capital where everybody has an equal opportunity to both raise money for what they care about, as well as to fund what matters to them. And so the future finance is all of us leaning into our lives, funding the things that matter to us, not waiting and relying on a third-party to do it for us. So, if you wake up in the morning and you’re, you know, craving a really good cup of coffee and there isn’t a coffee shop anywhere nearby. You know, maybe it’s time for you to start that coffee shop or fund someone who wants to start a coffee shop, too. You can make it happen now. You don’t need to sit and wait for the world to bring you what you hope it knows you want. It’s time for you to actually just go make it happen, whether as a creator or as a funder.
So that’s the world I see, that funding being as liquid as commerce. I see funding becoming a daily habit just like buying is a daily habit. I see funding maybe becoming even more of an important daily habit. People holding their funding decisions even closer to their chests and holding it with pride. Because funding isn’t just a way to get what you want but funding is a way to show to the world what you care about and what you’re about. It might even replace the resume or the personal profile on about how you kind of illustrate your identity to the world. So, I think it’s gonna be liquid and I think everyone will be doing it, and it’ll be part of your daily lives. And everyone will have a campaign, you know, whether it’s to raise money for your cousin’s cancer treatment, or to build that local restaurant that you’ve always wanted, or to help your favorite filmmaker get their start, or what have you.
Nathan: Look, I’m mindful of your time and we have to work towards wrapping things up. I have two last questions. One is as an entrepreneur, what has been one of your biggest struggles?
Danae: Well, it was a struggle in the early days, but then it took a very poignant lesson and piece of advice from my dad that I refer back to all the time that has helped me get over it. And the struggle is that whenever you’re trying to do something new in this world, if you’re trying to create any kind of meaningful change, especially change that you know will help the world, you have to expect resistance.
Nathan: Is there any secret strategies that you’d wanna share around crowdfunding, like is it something that you see out there that you see a lot of people not doing that you wish you saw more of?
Danae: You know, the world doesn’t like change. It likes to say no. It has incredible inertia. But as an entrepreneur, it’s your job to keep saying yes. And don’t expect any pats on the back and, you know, support. Just know that the world needs you to keep saying yes and eventually it’ll appreciate it. People were laughing at us. People were saying it would never work, to the point where when you hear it enough you would then start to question yourself, and question your thinking and ideas and vision. That’s the resistance happening. And so, I think, thank goodness my father shared what he shared because whenever something would go wrong, or I get to feel personally defeated or frustrated, or concerned, or worried, or whatever type of emotion that happens in a low, I would just remember my dad’s words. I’m like, “Oh, no, this is just the world saying no. I get it now. Okay, I can handle this.” Like, the world doesn’t know any better. It just has inertia so I got to keep charging forward.
And so, yeah, in the early days there are, you know, vendors would fail us and that would impact our ability to deliver to customers. And we got rejected by 92 venture capitalists before one said yes. So, you know, resistance comes in the form of ridicule, it comes in the form of rejection, it comes in the form of self-doubt. And you just have to see it as resistance and know that it’s your job to keep going. This thing that I’ve been dealing is just another example of resistance. And so we deal with it and move forward, and, you know, continue to innovate, and continue to help people think differently, and open their eyes and realize that change is possible, and a better way is possible.
Nathan: I’m curious, who do you learn from?
Danae: Oh, I learn from my team. I learn from my employees. I learn from our customers. I mean every day, you know, people are innovating. Our customers are using our platform in new ways, you know. I never thought… In Indiegogo, there is a couple that had used Indiegogo as a way to raise money to have IVF. They couldn’t afford to have a baby naturally. Well, they couldn’t have a baby naturally and they couldn’t afford to have IVF, and so they turned to Indiegogo. They actually ended up raising 90% of the funds from strangers, and that blew me away. I mean, I never envisioned Indiegogo as a way to fund a baby but they did it.
And, you know, Indiegogo is all about being open and flexible. And, like, we build all these functionality on the back end, whether it’s referral analytics, perk swapping functionality, fixed or flexed funding, you name it. We offer embedded campaigns called the Outpost. You can host your own Indiegogo campaign on your website but also kind of take advantage of all the benefits of having a mirrored version of the campaign on Indiegogo. So, all kinds of cool functionality, all functionality that our team has developed, all functionality that has come from direct feedback from customers, and all functionality that has been a result of innovative thinking and thinking outside of the box.
And so, I love Indiegogo not just because of what we’re doing but the people that we’ve attracted to come work here think that way. And they, you know, don’t take no for an answer and they get excited when there’s no template to follow. And they come up with the craziest ideas and make it happen. And it’s infectious, it’s like, it’s totally in a positive way self-reinforcing and self-perpetuating in a good way.
Nathan: Wow. I’m curious, how did you guys in the humble beginnings when you first launched Indiegogo, how did you get your first hundred customers? How did you get people using the platform?
Danae: One by one. We rolled up our sleeves and I went out to my classmates in business school and asked, “Who knows a filmmaker that needs money?” And every single person in my class said, “Oh, my cousin, my uncle, my neighbor, my whatever is a filmmaker trying to get their first film come off the ground.” And so, it’s my classmates that connected us all to our first filmmakers. And from there, we just worked with them to be successful. We learned in their experience what mattered in terms of driving funding success and what didn’t. And then we try to take all that feedback and productize it, and continue to improve experience. But the first 100 days, you know, we were just focused on getting as many customers using Indiegogo and proving that Indiegogo is a way to raise money. And we did whatever it took to make them be successful.
Nathan: Wow. And what are your thoughts on equity-based crowdfunding?
Danae: It’s exciting. You know, the original vision was to democratize investing and we gave up on the equity piece in the early phase when we decided we couldn’t boil the ocean, or we shouldn’t. But it’s actually come back around a lot quicker. We partner with the government on, the U.S. government at least, in helping them pass the Jobs Act. I actually did my own Indiegogo campaign back in 2010 to raise $1,000 which is called A Crowdfunding Campaign to Change Crowdfunding Laws. Which is to basically pay a lawyer to write a petition to the SCC to change the law, so that people could invest online. And we just protect them in a different way by limiting how much they invest versus just not allowing them, which is how those 1933-’34 Securities Laws are written. So, we’re really excited about it. We’ve clearly unlocked a whole different market, the perks-based market, which is incredibly motivating and exciting. And a lot of people may never want to use equity crowdfunding because perks-based crowdfunding allows them to maintain ownership of their idea. But I certainly think it can be a huge market and it’s a huge need, and a huge desire of people. Main street investors just like Wall Street investors want to be able to not just fund what matters to them but also invest in what matters to them, and have the opportunity to earn a profit.
Nathan: One of my friends, and you would know him, he’s the CEO of Fundable. He had a question that he wanted me to ask you. And he said, “How important will equity crowdfunding be with the extension of the IGG platform?
Danae: Oh, I can’t answer that at the moment because the laws aren’t finalized. So, we can’t make a business decision on how and when to execute against it, because we don’t know what we’re actually executing against. So, it’s all TBD but we’re leaning in on it. We’re excited about it. Philosophically, it makes a ton of sense for us.
Nathan: Awesome. And what advice would you give to early stage startups and aspiring entrepreneurs just starting on their journey?
Danae: For one, I would recommend that early stage startups and entrepreneurs ask themselves why. Why do they want to be an entrepreneur? And if their answer is just something around ego or fame, or rich, or whatever, I encourage them to stop and ask themselves again, why do they want to be an entrepreneur. Or really, like, focus on their idea. If they have a specific idea now that they wanna solve or they wanna create or build, ask themselves why do they wanna create it. Why does this problem that they’re solving matter so much to them personally? And the reason I say that is because entrepreneurship is really hard. Things don’t go according to plan. It takes way longer than you ever think it could. And if you’re not completely infatuated with solving a problem then you’ll give up. It’s just too hard. And I always say, you know, be married to your problem, not your solution, because the way you solve a problem may change. It may have to change over time in order for you to actually solve it the best. But just be committed to that problem. And if you stay committed to the problem, not the solution, then you’ll be able to have the ability to pivot and be flexible.
So, the second piece of advice is don’t aim for perfect. And I especially tell this to female entrepreneurs, business owners, because stuff for whatever reason, it’s society, conditioning, whatever, we train women to like be perfect and to have all their ducks in a row, and, you know, mind beat. You know, don’t make a scene, be nice. Entrepreneurship is all about making a scene. It’s all about change. It’s all about challenging the status quo and like making something better, and not just accepting something the way it is. So, you have to lean in and go after things. And the key is to not wait for perfect, you’re never gonna get perfect. You’re always going to figure…you’re gonna figure out what you need to figure out, as you’re figuring it out. And unless you take action, you’re not gonna get any kind of equal and opposite reaction. So, even if you made a wrong decision but at least making the decision, you get feedback very quickly that it was the wrong decision, not the right decision. And then you can move and pivot from there. And if it was wrong, then you change and you move forward. But if you sit there and try to debate in your head what, you know, which way is up, which way is down, which way is right, which way is left, you’re never gonna make any progress and you’ll be stuck in your head.
For me, it was in my head for too long. Not too long but it was in my head. Indiegogo didn’t move forward because it was in my head. And it wasn’t until I took an action which is quit my job and go back to business school to start something. It did actually momentum come from that. That’s how I met the co-founders and that’s how we built our study, and then the rest is history.
Nathan: And do you think your business school degree really helped you on your journey?
Danae: I think my business school experience completely helped me. It allowed me to get a fresh look at the world. I knew this problem that I wanna solve was paramount and kind of top of mind for me. But in leaving finance, I was actually able to look at finance through a different lens. So, I could actually solve the problem that has been plaguing it for so long. The problem being inefficient access to capital which is a result of gatekeepers making the system inefficient and full of friction. So, I wasn’t able to see that while I was in it. I had to step away from it to actually see that. So, business school helped me and it surrounded me with colleagues. It surrounded me with classmates and professors that had exposed to all different ways of thinking, parallel models, frameworks, you name it. And just being able to get exposure to all that, that really helped drive clarity around what we need to go do and test, and experiment, and push forward. So, plus, it had huge amount of moral support. Again, when the world was saying no to us and were ridiculing us, it was my classmates and professors who kept saying, you know, reminding us that it’s okay to say yes and it’s good, and it’s needed, and you should keep going.
Nathan: Yeah, I know. I know totally how you feel. Like the problem that you’re solving, it is a massive problem and it would have been…I’m sure there would have been so many tough times to know, you know, if to keep going and you doubt yourself. And, yeah, it’s amazing the platform and what you’ve created. So, thank you so much for taking the time. This has been a really interesting and insightful. And, you know, we’ve got a lot of gold there that we can use, so thank you.
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