Danae Ringelmann and Eric Schell, MBA 08s, revolutionize the crowdfunding industry and help turn dreams into reality.By Autumn Stephens
Not many people can say they revolutionized an entire industry. But Danae Ringelmann and Eric Schell, MBA 08s, can. They propelled the crowdfunding movement when they launched Indiegogo, one of the first crowdfunding sites, with co-founder Slava Rubin in 2008. (Kickstarter, Indiegogo’s chief rival, launched a year later.)
Since that time, Indiegogo’s growth has been exponential. Funds raised on the site in the past two years have increased 1,000 percent. Crowdfunding itself has disrupted the world of finance. Forbes reports that in 2010, global crowdfunding was an $880 million business. In 2014, that figure rose to $16 billion and is estimated to more than double this year to upwards of $34 billion.
Almost inconceivably, Indiegogo was first envisioned as an offline venture. “I knew nothing about the Internet,” Ringelmann, Indiegogo’s chief development officer, says. It was Schell, the CTO, and Rubin, the CEO, who insisted that only an online platform—in 2006, a novel and controversial proposition—could accommodate the free flow of information and capital that their vision required.
Indiegogo’s mission, Ringelmann says, has always been to “democratize access to capital by empowering all people to fund what matters to them—whether it be for patronage, perks, or even for profit.” Though a young company, its legacy is profound, and for having permanently changed the financing ecosystem for the better, Ringelmann and Schell are receiving Berkeley Haas’ seventh Leading Through Innovation Award at the annual Haas Gala in November. The honor recognizes alumni whose fresh thinking and questioning of the status quo has redefined how we do business.
The San Francisco-based Indiegogo, which has hosted over 300,000 campaigns in 224 countries and territories, prides itself on allowing all creative, entrepreneurial, or charitable ventures to run campaigns—and to let the community decide what will fly.
“The core idea of empowering everyone to fund what matters to them has resonated with a lot of people,” says Schell. “It is humbling to see how Indiegogo has enabled people across the world to make their projects happen.”
“It is humbling to see how Indiegogo has enabled people across the world to make their projects happen.”
—Eric Schell, MBA 08
Indeed, Indiegogo’s campaigns raise millions of dollars weekly for a vast and eclectic range of ventures. One of the most-funded campaigns, Hour of Code, has offered free computer-science tutoring to tens of millions of students in more than 180 countries. Scanadu Scout, a small device that reads a person’s vital signs when placed on the forehead and wirelessly transmits the data to a smartphone, gained not only backers from Indiegogo but also people willing to be usability testers to hasten the FDA approval process. More recently, the Syrian refugee crisis has resulted in a flurry of donation opportunities, with a variety of campaigns hosted on Indiegogo and Indiegogo’s fee-free personal-cause fundraising platform. Lighten the Load, for example, which aims to supply baby slings to parents fleeing war and persecution, was 400 percent funded in just two days.
According to Schell, Indiegogo has thrived in part because of four essential values that the co-founders established early on. “Fearlessness, authenticity, collaboration, and empowerment—we actually use those values throughout our company in business-model decisions, in how we filter for hiring, in product design, in operational decisions,” he says. For example, prioritizing empowerment across gender lines has resulted in a staff where 45 percent of the employees and 30 percent of the engineers are women—significantly above the average for tech startups.
Ringelmann, Schell, and Rubin have received many honors for their work. The trio has been named to Fortune’s “40 Under 40” list, and Ringelmann made ELLE’s “Women in Tech” list and received Watermark’s “Women Who Have Made Their Mark” award, among others. But for the alumni, recognition by the school where they honed their vision is particularly meaningful.
“It is a reflection of the support and hard work of so many people who have touched Indiegogo since its inception at Haas in 2006 until today—mentors, peers, customers, employees, friends, and family,” says Schell.
Ringelmann credits Haas with providing an environment that allowed Indiegogo to take root, especially during some early difficult times. After launching at the height of the 2007–09 recession, the co-founders endured three years of bootstrapping while 92 venture capitalists declined to invest. Not until 2011 did the company finally raise funding.
“While the world was ridiculing us,” Ringelmann says, “classmates were introducing us to our first customers. Professors were introducing us to our first advisors.” And, in a definitive vote of confidence, about half of their classmates mounted their own Indiegogo projects. “Berkeley Haas’ unconditional support of Eric, Slava, and myself is a testament of the school truly living our values, particularly Question the Status Quo and Beyond Yourself,” Ringelmann says.
Lately, Indiegogo has focused on helping campaigners not only reach their goals but build sustainable companies. One new development is InDemand, which allows successful campaigners to continue funding a project after its campaign period ends.
“Contributions resemble pre-orders and enable our campaigners to begin transitioning their business from funding to their next phase: commerce,” Ringelmann says. The co-founders are also contemplating the new, less restrictive SEC equity crowdfunding regulations and the game-changing implications for its business model.
Looking further into the future, Ringelmann, who sees crowdfunding as a powerful tool for narrowing the wealth gap, envisions shifts in individual behavior catalyzed, in part, by Indiegogo. “Funding will become a welcomed, daily opportunity and responsibility,” she says.
Schell is less inclined to predict. “What I can say for certain is that in five years and in 50,” he says, “even more people from even more places will be using Indiegogo to make their dreams a reality.” Which is, in the end, the most important thing.