Popular crowdfunding platforms like Kickstarter and Indiegogo have been a hotbed for the aspiring to fund product prototypes, publish artistic works and create everything from films to trendy foods. Now governments are stepping into the mix to harness the low-risk funding method for community parks, gardens, sidewalks and more. And as public-sector interest in crowdfunding has grown, so too has interest from startup companies.
One of those, Citizinvestor, offers a crowdfunding platform tailored for government. Co-founders Tony DeSisto, Jordan Raynor, and Erik Rapprich launched the Tampa, Fla.-based civic tech company in 2012 to help localities raise thousands of dollars for numerous projects across the nation. Public officials simply add photos and a description of projects and the Web app pitches them to interested citizens.
While still a young company, Citizinvestor compares well with the more established Kickstarter, notwithtanding Kickstarter's success — that since launch in 2009, has generated more than $2.2 billion for 100,000-plus projects. Citizinvestor’s own project funding success rate of 60 percent is higher than market leader Kickstarter’s rate of 36 percent. Funded projects have run from an $81,000 dog park to a roughly $1,000 set of bicycle racks.
For these and its other pioneering accomplishments, Government Technology selected Citizinvestor as part of its inaugural GovTech100 listing of companies to watch in 2016. To find out more, Government Technology recently spoke with DeSisto about Citizinvestor.
Government Technology: What prompted the idea for Citizinvestor?
Tony DeSisto, Citizinvestor co-founder: Citizinvestor was born out of my work on the city of Tampa Citizen Advisory Budget Committee. I was seeing all of these great projects that the city wanted to build, but didn’t have the funds or a way for the community to help. With the rise of crowdfunding, my co-founders and I thought there was a way to create a secure, scalable, online way to facilitate this community investment.
GT: How would you describe its business model and growth strategy?
DeSisto: We have two products each with their own business model. The Citizinvestor platform hosted at Citizinvestor.com allows our government partners to post individual projects to our site. It does not cost anything to post, but the project cost is increased 8 percent, and if the project is successful, Citizinvestor collects that extra 8 percent.
Citizinvestor Connect is our white-labeled custom software product that allows our partners to have their own custom branded site to host as many projects as they want. It also has extra features that allow citizens to submit ideas, have these ideas converted to crowdfunded projects, and then moved into the implementation phase that allows for updates and collaboration after the project is funded. We charge an annual fee between $5,000 and $20,000 depending on the size of the municipality and allow unlimited projects with no additional costs.
GT: Since you launched the platform, what percentage of the crowdsourced projects have met their funding goals?
DeSisto: Since launching, 60 percent of projects have reached their all-or-nothing funding goal.
GT: Along these same lines, what are the most successful kinds of projects and what funding range do they fall within?
DeSisto: This is a common question from our government partners, and although some types of projects are more prevalent — mainly parks projects — the type of project is not predictive of success. Instead it is two factors [clear communication and outreach]:
1. Is the project description specific in what will be accomplished with the funds raised and is there a narrative of how and why this helps the community?
2. How much the government entity that posts the project does outreach and promotion of the project, especially if they are able to identify and empower local champions in the community to help with the outreach and promotion.
GT: Where are most of the jurisdictions you work with in U.S.?
DeSisto: We are spread out across the U.S. and have had projects in every region of the country. However, I would say the three largest concentrations of projects have been in California, New England, and Illinois.
GT: What do think is compelling the new trend in citizen-based crowdfunding?
DeSisto: Government is an inherently collaborative process. The advances in technology have allowed us to create new tools and platforms for more engagement in the governing process. At Citizinvestor, we say we empower people to invest in their community whether it be ideas, time or funding. I think citizens have always wanted to have this impact and the tools and technology are finally catching up with these desires.
GT: Are you planning any new digital tools or features for the platform in the near future?
DeSisto: We are continuing to improve on the Citizinvestor platform and Citizinvestor Connect. Currently we are working on a participatory budgeting product that will be another tool for governments looking to bring citizens into the decision-making process.