Arrow to give $1M to startups
And stories of successful campaigns that never delivered are constant. Most recently, Skully, maker of the smart motorcycle helmet that crowdfunded on Indiegogo a few years ago, filed for bankruptcy. No refunds will be processed or helmets shipped.
Such failures sully the reputation of all crowdfunding sites. And Indiegogo decided there had to be better ways to help promising campaigns avoid early miscalculations on costs, manufacturing and delivery, Indiegogo CEO David Mandelbrot said.
“For the last two years, we have been very focused on helping the entrepreneur to bring their ideas from concept to market,” Mandelbrot said. “While we built this amazing platform to raise money, we learned that after the funds are raised, they had challenges getting the products made and to consumers.”
The partnership with Indiegogo came about mutually. Many of Indiegogo technology campaigns were already using Arrow for supplies and services. Being able to roll out Arrow’s resources to all tech campaigns seemed like the next stage for a crowdfunding site.
“This is without question one of our key strategic alliances here at Indiegogo.” Mandelbrot said. “The best partnerships are created when they further the business interest for both companies. We had an interest in helping our entrepreneurs manufacture their products but we don’t have a significant expertise in electronic manufacturing. Arrow had that but wanted easier access to the new crop of entrepreneurs creating hardware and electronics.”
Arrow, which has already looked at “hundreds and hundreds” of campaigns in an early pilot with Indiegogo, had honed in on the crowdfunder after noticing “literally hundreds of millions of dollars from our customers for projects that started on Indiegogo,” Anderson said.
In May, Arrow was given exclusive access by Indiegogo to see what campaigns were in the works by technology startups. Startups can get access to Arrow’s prototyping tools, design process reviews, discounts on hardware and useful advice, like how much it will really cost to build a product.
“The response has been tremendous,” said Anderson, whose team focused on the Indiegogo partnership numbers around 50 people. “We literally have a line of people that want to go through the design process with our engineers. We have design engineers looking at how the designs will work from (blueprints) to designs on a napkin.”
Startups that get an Arrow-certified badge and are deemed an “Arrow Innovator” have a chance at the $1 million funding, which is expected to be doled out to between 20 and 50 campaigns over the next 12 to 15 months.
“If we think your campaign is aligned with Arrow’s views, we will completely fund your campaign,” Anderson said. “If someone needed $100,000 to make their idea a reality, let’s say an augmented reality headset, we’ll give them $100,000 to do that.”
The full funding is to help the creators focus on the product and not raising money, although companies can continue crowdfunding and support from individuals.