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Ask HN: Why is there no Kickstarter for startups yet?

• toomuchtodo 5y ago
  https://republic.com https://republic.com
• helsinkiandrew 5y ago
  There are complexities with taking money from unaccredited investors, but there are some (seedinvest, wefunder, fundable) and many more that do peer to peer business loans for smaller and/or social companies.
• iandanforth 5y ago
  Perhaps you can contrast with wefunder.com so we can better understand your question?
• geoah 5y ago
  I’ve seen micro ventures before, seems a bit more structured that I was expecting probably because of regulations? If you google for micro investments or micro angels in the context of startups you might some relevant links. Assuming that the service deals with the vetting of the startups then I can see myself using it.
• PragmaticPulp 5y ago
  If the customer would receive shares of the company in exchange for their money, that’s just investing. There are public platforms for crowd investing of startups, but they require users to be accredited investors due to regulations. That’s not the real issue, though. The real issue is that good startup teams don’t have any problem raising normal investment capital right now. The only companies who would even want to raise money from the public would be those who couldn’t get normal investment, which are almost exclusively bottom of the barrel companies that have been passed on by many professional investors. For many reasons, not just regulatory, you don’t really want to have thousands or tens of thousands of tiny investors to manage for your startup. Companies tried to skirt regulations with the ICO craze a few years ago. It was almost universally a complete disaster for investors. A lot of ICO companies got extremely wealthy and a lot of investors discovered that without the regulations and share ownership they don’t really have much of anything.
  • mkdirp 5y ago
    > There are public platforms for crowd investing of startups, but they require users to be accredited investors due to regulations. Perhaps in the US? In the UK we have Crowdcube which anyone can sign up to and invest in new (and older) startups.
    • phphphphp 5y ago
      There's also Seedrs which was just acquired by Republic[1], the major US platform pursuing the crowdfunding model. The difference vs. Kickstarter is the barrier to entry: companies must go through approval to list on CrowdCube, Seedrs, Republic etc. (which is probably for the best!). The OP is correct though, crowdfunding (in the UK at least) is complete and utter garbage, where most companies raising are untouchable by traditional investors. [1] https://republic.com/ https://republic.com/
  • BerislavLopac 5y ago
    > If the customer would receive shares of the company in exchange for their money, that’s just investing. How about the customer paying for future services?
    • TrueGeek 5y ago
      Isn’t that just normal Kickstarter
    • PragmaticPulp 5y ago
      > How about the customer paying for future services? That’s just Kickstarter.
  • m_ke 5y ago
    > The real issue is that good startup teams don’t have any problem raising normal investment capital right now. I know plenty of founders of companies that raised huge rounds from top VCs and most of them would have preferred to avoid dealing with VCs if there was an alternative. VCs are a hurdle and their incentives are not really aligned with yours. Getting buy in from your customers and peers is a much more sustainable path long term if your goal isn't to pump and dump your business in 4-8 years. The VC path is littered with dead companies that could have been sustainable mid sized businesses and successful mid sized businesses that were pumped full of cash and ran off the cliff.
• joshuajomiller 5y ago
  What are you suggesting? Is the idea to allow potential users to put some money down, or to show interest before a startup idea is fully executed? If so, you can do that pretty well with a landing page and a sign up form.
  • tchock23 5y ago
    Yeah, OP wasn’t clear on whether this is for equity or just pre-launch indications of interest from prospective customers. Would be helpful to clarify since most of the comments here so far have focused on equity implications.
• deleted 5y ago
  [deleted]
• kylekellogg 5y ago
  This sounds sort of like what SeedInvest does https://www.seedinvest.com/ https://www.seedinvest.com/
• Blackstone4 5y ago
  It is called crowdfunding....
• waffle_maniac 5y ago
  wefunder.com
• jordanthoms 5y ago
  It does exist, where laws allow for it - in NZ we have Snowball effect which does this [1]. As others have said though, when there's so much early stage capital around and you could instead raise from a few angels or a early-stage VC (who will have a larger stake and may be more able to help with later rounds) equity crowdfunding isn't that attractive for most founders. There are good businesses which for some reason can't access that funding which might show up on a platform like this, but don't see it being all that common. 1 - https://www.snowballeffect.co.nz/ https://www.snowballeffect.co.nz/
• shafyy 5y ago
  Startups can and do already use Kickstarter and similar platforms. Or what would be specific to startups in this idea?
• troysk 5y ago
  JOBS Act, IEOs (cryptocurrency based) and AngelList do similar stuff as Kickstarter. Kickstarter is also used. My understanding is there are legal issues, many which the JOBS Act resolved. The laws are there to protect the not so well informed investor from losing their money.
• vintermann 5y ago
  This has been tried many times, it's called "equity crowdfunding". However, I've yet to find a single equity crowdfunding project which was a success for its backers. Kickstarter originally allowed only artistic projects, and there were good reasons for that. Suppose you are doing an artistic project, and you go to the bank for a loan. The banker now has to guess: will other people want this product? But if you go to Kickstarter instead, it's not some expert's belief about what people would want which decides if you get funding or not. It's the people who would want it, directly. For "equity crowdfunding" project, that advantage goes away. Your would-be backers have to ask themselves not if they like it, but if other people will like it. We're back to guessing each other's preferences. In fact, they should be very careful about their own preferences: If they like the product, it's easy to overestimate how much others will like it. And if they think they have a chance to get rich, they might convince themselves the product is better than it is - getting people caught in a loop between those two biases is how MLMs scam people. And "equity crowdfunding" projects have rather leaned into that scammy angle, in my experience.
• marcotm 5y ago
  There's a Kickstarter for startups. It's Kickstarter. But looking at the current project guidelines, I think you are right that Kickstarter is not (or does not want to be) the right platform for pure software / SaaS / etc. startups (which I guess you are thinking about). So the equivalent would be something like backers pay x amount of money to get a lifetime, one-year, whatever license of the final product (in contrast to shares like in crowd investing). Funds will only be paid to the project initiator if they get above their pre-defined threshold (similar to Kickstarter). I definitely think that this could be valuable, but I'm also not sure if that space is not already covered by existing companies. Seems relatively straight forward. Somehow similar: Early access titles on Steam, etc.
• ssivark 5y ago
  It’s called an IPO :-)
• glanzwulf 5y ago
  There's one I always assumed was Kickstarter for Startups https://www.seedrs.com/ https://www.seedrs.com/
• sleepingadmin 5y ago
  It's illegal in many countries to advertise for investments like this. So for example in the USA: https://www.law.cornell.edu/cfr/text/17/230.502 https://www.law.cornell.edu/cfr/text/17/230.502 You can't advertise, in fact much of this 'kickstarter for investment' would be virtually blank by law. You would have to pre-screen and qualify each investor on your own. Nobody would be interested in investing this way. Very long history on why this is important and why virtually all countries with an exchange do this. Want to pivot your idea? Create "uber plumber' or 'uber electrician' or 'uber handyman' where you can basically request an electrician and electricians can join up and get jobs easily like an uber eats.
  • m_ke 5y ago
    It's clearly much better to have the populace gamble their money away on sports, penny stocks, lotteries and crypto scams.
• gwbas1c 5y ago
  Investing in a startup, or pretty much any business that isn't public, requires a significant amount of due diligence on the part of the investor. Even then, more startups fail than succeed. Retail investing directly into startups, like how we can buy stock, would essentially be gambling. IMO, it makes sense to do this through a proxy, like a mutual fund or other kind of investment vehicle. The investment vehicle would need to do a lot of the due diligence. Perhaps someone could do the due diligence before putting startups on their page to solicit investment? Even then, motivations must be questioned. Sometimes startups only exist to be sold to a larger company; but once the acquisition goes through, there isn't much left.
• sockpuppet69 5y ago
• agilob 5y ago
  Like this one? https://www.crowdcube.com/ https://www.crowdcube.com/