Will Crowdsourcers raise more money than they can make?

Just when we were despairing that the Social Media bubble had fully deflated, thanks to Facebook, we find it may just have moved, to Crowdsourcing - Liz Gannes:

Kickstarter may be the best-known brand in crowdfunding, but Indiegogo now has the biggest war chest. In a new round announced today, Indiegogo now has the backing of Insight Venture Partners and Khosla Ventures. Along with previous investors, the firms provided $15 million in Series A funding for Indiegogo, adding to $1.5 million raised last year. (Kickstarter raised $10 million in 2011.)

Unlike Kickstarter, Indiegogo is open to all projects, is available worldwide, and allows users to keep funding even if they don’t meet their goals (with a 5 percent additional fee). The site had earlier focused on fundraising for film projects, but is now open to any creative, cause-related or entrepreneurial idea.

The platform hasn’t had any crazy breakout hits like the $10 million Pebble watch, but it recently helped raised $325,000 for a film project called “Angry Video Game Nerd,” which was a new record. Indiegogo says it distributes millions of dollars a month.

The site levies a 4% fee for successful campaigns, for campaigns that fail to raise their target amount, users have the option of either refunding all money to their contributors at no charge or keeping all money raised but with a 9% fee. Assuming an average 5% fee, and say that it has 33% net margins ongoing, that means that just to get the $16.5m investment cash back assumes that it has to make nearly $1bn in total turnover, in the VC exit timescale of say c 5 years. No pressure there then*.....

That, and the low barriers to entry (think Incubator 2.0) plus (we will bet) other VC or offset-funded "me toos" coming in with lower fee % rakes, will make this an "interesting" sector going forward. To the winner the (increasing returns) spoils clearly, but what will the margins look like longer term?

Incidentally, take a look at this excellent satire on the current Bubbleicious Social IPO craze - Ponzify.com. Truly the "undertaking of great advantage; but nobody to know what it is" 2.0

*I agree that a breakeven analysis is not the best way to value a startup, but it is always a decent sanity check as to "what you have to believe"....