5 ms·

I liked the part where he says Kickstarter sucks because you donate your money to them without a stakeholder position or ownership in your investment of any kin

by antocv 13y ago

I liked the part where he says Kickstarter sucks because you donate your money to them without a stakeholder position or ownership in your investment of any kind. Its the reason Ive kept my money in my wallet and not thrown it around on kickstarter-projects, instead donated to FSF, EFF and Wikileaks among others. Any takers to start up a kickstarter-clone without donation but part ownership? With pledges for more money to throw into project when it reaches a threshold and so on. Basically what we had 100 years ago with normal public stock traded companies but in a digital world.

pja 13y ago
My understanding is that doing this is complicated because selling securities which are not tradeable on open liquid markets to non-accredited individuals is frowned upon by the SEC (and similar entities in the EU). That's not to say that it's impossible to do: there's just a legal thicket to navigate & the legislators have teeth! (This might be why VCs have stayed away? They must have been pitched this idea over and over again in the last couple of years. Of course funding a competitor for your own revenue stream might not be something that your average VC is going to do either :) ) Kickstarter is fantastic for funding things which are ready to go but just need the capital to pay for volume manufacture up front. If the product isn't ready to ship in that form & their asking for funding to get it into that state then it's much more risky. I've funded things on kickstarter which were pretty much "I'd like to print this comic / book / whatever, if I can get a bunch of pre-orders in up front then everyone wins." Kickstarter is amazing for those kind of creator-driven projects.
fennecfoxen 13y ago
He doesn't say that. He says "I have nothing against the kickstarter approach" but it's insane and it sucks that they're legally forbidden from giving you an ownership stake. way-to-keep-the-little-guy-down etc
pja 13y ago
NB The JOBS act is supposed to enable this kind of crowdfunding for startups, but the SEC are dragging their feet over it apparently: http://www.nytimes.com/2012/12/27/business/smallbusiness/why-the-sec-is-likely-to-miss-its-deadline-to-write-crowdfunding-rules.html http://www.nytimes.com/2012/12/27/business/smallbusiness/why...
ma2rten 13y ago
A former college of mine set out to start a company like that: https://www.sprowd.com/ https://www.sprowd.com/ I didn't follow them since then. Looks like they tried to crowd-fund themselves, but failed. However, he seemed very passionate about this idea. So, I would be surprised if they'd give it up easily.
losvedir 13y ago
Sounds a lot like WeFunder[1], which currently only allows accredited investors to take part, I believe, but because of the recent JOBS act will allow ordinary people to invest in the coming years. [1] http://wefunder.com/ http://wefunder.com/
melling 13y ago
I don't see why it's important that you become an owner. You are helping to fund what you believe is a worthwhile product. When you buy an Android or iOS phone, for example, you are helping to fund a company. You don't get ownership for that company. By funding individuals, or small groups, I believe that most are efficiently using the funds, and you are getting products that most larger companies couldn't be bothered with.
- kazagistar 13y ago
  The problem is, you don't have any assurance of getting anything. My condition for kickstarters is some kind of open sourcing clause, so that even if the creator fails, you are still assured of some kind of partially finished product.
  - droidist2 13y ago
    Interesting idea. If you go bust, your intellectual property gets turned over to everyone like so much piñata candy.
dublinben 13y ago
I completely agree with you and the author. It's why I only support crowdfunding projects which aim to freely release their product upon completion. I'm happy to contribute to a bounty to release a new work into the public domain, but I'm certainly not going to provide free capital to a commercial entity which will retain all future profits for itself.
macroresilience 13y ago
As the comment by 'pja' highlights, most of the restrictions to such an approach are legal. The least restricted market in this regards is the United Kingdom where there are quite a few businesses in the crowdfunding/peer-to-peer lending space already - for equity funding see Seedrs[1] and Crowdcube[2].There's even instances of SMEs raising equity from the public directly e.g. Brewdog[3]. The UK regulator (FCA) is just catching up so things may change next year[4]. [1]: http://www.seedrs.com/ http://www.seedrs.com/ [2]: http://www.crowdcube.com/ http://www.crowdcube.com/ [3]: http://www.brewdog.com/equityforpunks http://www.brewdog.com/equityforpunks [4]: http://www.reuters.com/article/2013/10/03/britain-crowdfunding-rules-idUSL6N0HT23Z20131003 http://www.reuters.com/article/2013/10/03/britain-crowdfundi...?

by antocv 13y ago

pja 13y ago

My understanding is that doing this is complicated because selling securities which are not tradeable on open liquid markets to non-accredited individuals is frowned upon by the SEC (and similar entities in the EU). That's not to say that it's impossible to do: there's just a legal thicket to navigate & the legislators have teeth! (This might be why VCs have stayed away? They must have been pitched this idea over and over again in the last couple of years. Of course funding a competitor for your own revenue stream might not be something that your average VC is going to do either :) ) Kickstarter is fantastic for funding things which are ready to go but just need the capital to pay for volume manufacture up front. If the product isn't ready to ship in that form & their asking for funding to get it into that state then it's much more risky. I've funded things on kickstarter which were pretty much "I'd like to print this comic / book / whatever, if I can get a bunch of pre-orders in up front then everyone wins." Kickstarter is amazing for those kind of creator-driven projects.

fennecfoxen 13y ago

He doesn't say that. He says "I have nothing against the kickstarter approach" but it's insane and it sucks that they're legally forbidden from giving you an ownership stake. way-to-keep-the-little-guy-down etc

pja 13y ago

NB The JOBS act is supposed to enable this kind of crowdfunding for startups, but the SEC are dragging their feet over it apparently: http://www.nytimes.com/2012/12/27/business/smallbusiness/why-the-sec-is-likely-to-miss-its-deadline-to-write-crowdfunding-rules.html http://www.nytimes.com/2012/12/27/business/smallbusiness/why...

ma2rten 13y ago

A former college of mine set out to start a company like that: https://www.sprowd.com/ https://www.sprowd.com/ I didn't follow them since then. Looks like they tried to crowd-fund themselves, but failed. However, he seemed very passionate about this idea. So, I would be surprised if they'd give it up easily.

losvedir 13y ago

Sounds a lot like WeFunder[1], which currently only allows accredited investors to take part, I believe, but because of the recent JOBS act will allow ordinary people to invest in the coming years. [1] http://wefunder.com/ http://wefunder.com/

melling 13y ago

I don't see why it's important that you become an owner. You are helping to fund what you believe is a worthwhile product. When you buy an Android or iOS phone, for example, you are helping to fund a company. You don't get ownership for that company. By funding individuals, or small groups, I believe that most are efficiently using the funds, and you are getting products that most larger companies couldn't be bothered with.

kazagistar 13y ago
The problem is, you don't have any assurance of getting anything. My condition for kickstarters is some kind of open sourcing clause, so that even if the creator fails, you are still assured of some kind of partially finished product.
- droidist2 13y ago
  Interesting idea. If you go bust, your intellectual property gets turned over to everyone like so much piñata candy.

dublinben 13y ago

I completely agree with you and the author. It's why I only support crowdfunding projects which aim to freely release their product upon completion. I'm happy to contribute to a bounty to release a new work into the public domain, but I'm certainly not going to provide free capital to a commercial entity which will retain all future profits for itself.

macroresilience 13y ago

As the comment by 'pja' highlights, most of the restrictions to such an approach are legal. The least restricted market in this regards is the United Kingdom where there are quite a few businesses in the crowdfunding/peer-to-peer lending space already - for equity funding see Seedrs[1] and Crowdcube[2].There's even instances of SMEs raising equity from the public directly e.g. Brewdog[3]. The UK regulator (FCA) is just catching up so things may change next year[4]. [1]: http://www.seedrs.com/ http://www.seedrs.com/ [2]: http://www.crowdcube.com/ http://www.crowdcube.com/ [3]: http://www.brewdog.com/equityforpunks http://www.brewdog.com/equityforpunks [4]: http://www.reuters.com/article/2013/10/03/britain-crowdfunding-rules-idUSL6N0HT23Z20131003 http://www.reuters.com/article/2013/10/03/britain-crowdfundi...?