Kickstarter can't be used to raise money for causes, whether it’s the Red Cross or a scholarship, or for “fund my life” projects, like tuition or bills.
Indiegogo has no problem with it though.
Kickstarter also requires each project team to sign up for their own Amazon payments account. Why wouldn't Kickstarter just collect the money and then wire it / cut a check to the funding recipient?
Also, why does Indiegogo charge upfront while Kickstarter waits until the campaign is successful?
The whole crowdfunding space seems to operate pretty illogically. Are there legal complexities that aren't apparent to an outsider that force their hand?
Kickstarter's FAQ clearly states that you need to be a US, UK (or now Canadian) citizen/business and you should prove it (SSN/government-issued IDs, address etc..) in order to launch a project.
So, can I ask you how this project has been published (and funded) http://www.kickstarter.com/projects/1054394377/idae-the-book... given the fact that the company is Italian, the team members seems to be all Italian judging from their names, the location indicated was "Milan, Italy" and the product was going to be made in / shipped from Italy?
Maybe it's just "ok" to have somebody in the US/UK/CAN that acts as a middleman for the project?
N.B. the above project is just an example, I'm Italian and I've searched from something that seemed to be founded from Italy
As for payments, a big issue is overhead, chargebacks, and failures. Using amazon payments may insulate kickstarter from some of that.
One may ask why kickstarter isn't just geocities with easy to add paypal buttons everywhere, but I think it's obvious that such a site would probably not be as successful as kickstarter.
Edit: some stats: during 2012 Kickstarter had about 18k funded projects with a total of nearly a third of a billion dollars in funding. Indiegogo doesn't release stats for the total amount of project funding in a year but it's quite evident that it is far lower than kickstarter's numbers.
<< All-or-nothing funding is a core part of Kickstarter and it has a number of advantages: It's less risk for everyone. If you need $5,000, it's tough having $1,000 and a bunch of people expecting you to complete a $5,000 project.
It motivates. If people want to see a project come to life, they're going to spread the word.
It works. Of the projects that have reached 20% of their funding goal, 82% were successfully funded. Of the projects that have reached 60% of their funding goal, 98% were successfully funded. Projects either make their goal or find little support. There's little in-between. >> http://www.kickstarter.com/help/faq/kickstarter%20basics
Meanwhile, Indiegogo is more agnostic about the projects they work with. Because their projects aren't all creative, you can set up your projects to either use "all or nothing" funding (aka Fixed Funding) or more "Flexible Funding":
<< If your campaign is set up as Flexible Funding, you will be able to keep the funds you raise, even if you don't meet your goal. If your campaign is set up as Fixed Funding, all contributions will be returned to your funders if you do not meet your goal. Flexible Funding campaigns that meet their goal are only charged 4% as our platform fee, whereas campaigns that do not meet their goal are charged 9%. >> http://www.indiegogo.com/indiegogo-faq
Indiegogo does offer refunds to backers of Fixed Funding projects that don't fully fund... but they don't offer refunds to members of Flexible Funding projects. In fact, they charge 9% to those people... possibly to offset the margin loss they incur for refunds of Fixed Funding projects that don't fully fund.
In any case, there are two ways to program pledges from backers, given these specs:
1) You can charge the backer's credit card right away and then refund if the campaign doesn't fully fund. 2) Or you can auth the card right away and then only charge the credit card if the projects fully fund.
Kickstarter does the latter: their backend (powered by Amazon Payments) authorizes a backer's credit card when someone pledges... but then doesn't charge the card right away. Instead, Kickstarter waits until the project successfully funds before charging the card. If the project doesn't fully fund, then the credit card of the pledger is never charged.
Not a lot of payment processors will support such a model. Amazon Payments is one of the few... although they actually stopped onboarding new crowdfunding sites last year: http://www.wired.com/business/2012/08/crowdfunding-gets-stic...
So in short, it's less of a legal complexity (as far as I can tell) and more of an issue around:
1) Margin risk around refunds of projects that don't fully fund. 2) Making sure the customer experience of pledgers is a good one.
Nobody is stopping you from doing that if your desire is absolute freedom in how you collect donations and what you do with them. The point of Kickstarter is to find a balance between allowing creators to do whatever they want and helping them end up successfully funded.
You sarcastically say good luck with that as if this isn't a proven method that leads to far more success, but it is. While it's always been possible to solicit donations for a project, it's really only been successful and widespread since the the existence of projects like Kickstarter that put pressure on the creator to actually deliver.
The pretty website and the name aren't what makes Kickstarter successful. The rules are. Nobody was waiting all this time with a project they wanted crowdfunded just hoping for someone to launch a website to make putting that up easier. They were waiting for a platform that users trust and are interested in. They wanted a chance to actually be funded if they chose to put themselves out there. If they thought they could get that "with freedom" they would have done so already.
So good luck finding people that want to throw money at your ideas with no rules, restrictions or protections in place. I think you'll find it's a pretty shallow pool. Keep in mind that absolute freedom from the perspective of a creator equals absolutely no accountability from the perspective of backers and crowdfunding requires both to be successful.
Without violating my NDA, I can share the following:
Both companies have the same set of goals: to provide a marketplace for innovative ideas. They have different ways of achieving this.
Kickstarter does this by allowing select projects to be associated with its brand, which due to their selective nature, confers a perception of trustworthiness to potential funders. You know that there's very little chance of a Kickstarter project being a scam, and moreover, that the project you fund will probably make good on their promises.
This is why they've stopped allowing product mockups -- to lower risk for funders.
Indiegogo is more liberal, allowing your project to succeed or fail based on the strength of your network, rather than the additional trust conferred by the brand itself. While the guys over at 'gogo are really focused on preventing fraud, the very nature of 'every project can be funded' means that more projects will fail to ship.
In my experience, Indiegogo is really great for projects where the goal is not some type of new product, but rather some sort of well-understood goal. Like saving a clinic for pregnant woman in San Francisco, or raising money for a child to get a lung transplant. Kickstarter is more about innovation -- Cards Against Humanity, the Pebble watch, etc.
Same goal, different ways of getting there. Basically, Kickstarter is Apple, Indiegogo is Facebook.
