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"And I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition." I'm guessing that pretty much sums up the reactio

"And I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition." I'm guessing that pretty much sums up the reaction of everyone who backed the initial kickstarter. Sounds like a serious lapse of "dance with the one who brung ya" to me.

Camillo 13y ago
When I said that it was silly to simply donate money to a commercial venture without gaining any stake in it, they called me a naysayer. Who's saying nay now?
- interpol_p 13y ago
  How is it a donation if you receive the item you backed? Most people backed Oculus to get their hands on a dev kit (I did). I don't feel like I donated — I feel like I got my money's worth.
  - zyx321 13y ago
    A lot of people backed for the "change the world" promise: "Changing the way people experience video games forever." Of course nobody should be surprised if that turns out to be a bold-faced lie, but that doesn't mean it's not disappointing.
    - interpol_p 13y ago
      Did you personally back for the "change the world" promise?
- drcode 13y ago
  nay
- noonespecial 13y ago
  You are quite right, of course. But kickstarter is a brand new animal in the world of products and financing. There aren't any laws or even any concrete social norms around it yet. Perhaps people should "know better' but I'm not sure that's helpful. In the absence of laws or codified rules we should expect to fall back on manners. What Oculus did feels bad because its rude. At the very least, they should recognize that they are in uncharted territory. A bunch of random strangers gave them gifts because they believed in the vision. If that vision turns into a multi-billion dollar payday, they might consider giving a few gifts back to those kind strangers. Its not like they don't have a list of them all with contact info and everything. It would be polite to do so.
  - avar 13y ago
    What do you mean there aren't any laws? You hand people money in exchange for their non-legally binding vague promises. This model of exchange has been around for hundreds if not thousands of years. Legally speaking Kickstarter is nothing new. If I meet someone on the street that promises me to try out some new idea and I give them money the courts aren't going to give me any more credence than someone who handed a $50 bill to a bum. How is this in any way a new and novel legal situation? The only thing that's new is that now due to the Internet more people have the ability to easily give out their money to potentially stupid initiatives.
    - noonespecial 13y ago
      In that reguard, its the same thing it's always been. A gift. Reciprocity is not required by law, only common decency. The new about kickstarter is it seems we're looking for something more than a gift, less than a regulated investment and not quite a sale. That's novel.
      - avar 13y ago
        Maybe you're looking for something more than a gift, but are you actually entitled to more than that? Are you a shareholder in these companies than you fund through Kickstarter? I think not. So why do you think you have any rights beyond someone who's donating money to a cause that may never pan out? It's perfectly fine to fund something through Kickstarter, but for some reason it seems that some people doing it think they're entering into a deal that isn't really there. Generally when you give money through Kickstarter you're giving it away without any string attached, only if the company pans out might you actually get some small gift, not a share of the profit. What's so hard to understand about that? The model's fine. The problem is that for some reason people donating to it think of themselves as shareholders, not donors.
- InclinedPlane 13y ago
  True. But back then there was no other option for crowd funding. That's only changing just now as the SEC is finally implementing the crowd funding provisions of the JOBS act.
  - anigbrowl 13y ago
    Yeah, I'm surprised there hasn't been more discussion of that here, though obviously the slow nature of the rulemaking process causes people's interest to wane. Considering the fact that large acquisitions will continue in the future (even if we are in a bubble or unusually inflated period right now), and that even a micro-investment at the right time can lead to huge multiples, it'll be very interesting to see how this changes the landscape. Not being a game or graphics developer I was very interested in Oculus but decided to wait for the consumer version of the technology. However, if I could have bought a tiny equity position for $100 I would probably have done so, since I'm pretty confident on my judgment about which technology is 'hot or not,' and I would likely be celebrating a nice little uptick in my net worth right now.
    - InclinedPlane 13y ago
      Well, also, the SEC made the crowdfunding regulations a bit ridiculous so they may not actually end up having a major impact on investment funding.
      - anigbrowl 13y ago
        They can iterate. But also, they were working within some tight legislative constraints (eg $1m cap IIRC) and when you look at the public comments a lot of them 'how will you guard against grifters' and the like. I was pretty depressed by how vapid most of the comments were, incidentally...I feel bad for whoever was required to sit down and read and classify them all.
  - GBond 13y ago
    Even so, KS was never about an exchange of equity for money (other platforms will fill this need like Angelist Invest). KS exchanges ownership in a project's human-level vision (and sometimes a early release of the product) for a donation. People are like Notch are peeved because Oculus was not upfront when entering this social contract.
- bowlofpetunias 13y ago
  Lot's of people agree with you. In crowdfunding circles, Kickstarter is considered a bubble that will burst hard when people realize they're funding companies in exchange for beads and trinkets. Sure there are plenty of projects for which the Kickstarter formula is perfectly valid. Funding companies isn't one of them, and that's where most of the money is. If that stops happening, Kickstarter's may not be enough to keep them afloat.
  - thanatropism 13y ago
    To be fair, american government bonds have been ZIRPish since... You could invest in third world governments with interest rates that are too high for their S&P/Moody's/Fitch ratings. Look how revolutionary this idea.
bduerst 13y ago
It blows my mind how much people will throw their money at Kickstarter projects for the simple feeling of goodwill or novelty knick knacks (bumper stickers, buttons, etc). $10,000 should have bought some small amount of equity, even if it was only non-voting and non-dilutable.
- pepon 13y ago
  The problem with Oculus kickstarter project was that you were buying a dev kit, not a final product. So now they sell the company and you have a dev kit for a facebook product... and the final usage of the Oculus may be very different than the one you thought it was going to be when you purchased the dev kit. That cannot happen with other kickstarter projects that sell a final product like bumper stickers, buttons... In this case, the only difference with a normal purchase is that you buy the product before they manufacture it, so the startup avoids taking risks.
  - joesb 13y ago
    What's the different? If the final usage of Oculus Rift is different once they sold the company to facebook, you are still going to get different final product if you buy/pre-order it via kickstarter.
- burntroots 13y ago
  I'm curious how you feel about open source, then. Specifically, node.js. Donating hours of your time working on something that eventually got sold for lots of money that you won't see a dime of. Sounds similar.
  - akerl_ 13y ago
    Except if I'm a major contributor on an open source project, I A) get to shape software that I (generally speaking) am a consumer of, and B) can put that on my resume. Donating to a Kickstarter may give you some superficial "control" over project direction, but it's a far cry from open source, and it doesn't have the future career impact.
bnferguson 13y ago
As an early backer of the Kickstarter it's not my reaction at all. The Kickstarter was only about getting a single product delivered: the dev kit. Once they did that, any obligation they had to me was filled. Basically, that already danced with me. They're certainly free to move on to the folks with more money now.
vehementi 13y ago
I'll go ahead and dance with anyone for 2 billion dollars?
ShellfishMeme 13y ago
Isn't that a bit hypocritical? I bought the minecraft alpha from notch at an early stage because of promises of having a modding API added to it soon. Instead, lots of small insignificant features were added that I wanted nothing to do with. I felt they were bad for the game and only focused on short term popularity. Still, it seemed, they were beneficial for the long term growth of mojang, which was the main response to such criticism. So now notch is offended by a company he backed partly with the money he got from people like me, whose hopes of having a fully moddable open sandbox game made them invest, changing its strategy to allow them to reach a bigger market. I can directly relate to that, but I cannot say that I sympathize. This is what happens, when you invest in something when it's still in an early stage of finding itself. Bad luck, move on.

Camillo 13y ago

When I said that it was silly to simply donate money to a commercial venture without gaining any stake in it, they called me a naysayer. Who's saying nay now?

interpol_p 13y ago
How is it a donation if you receive the item you backed? Most people backed Oculus to get their hands on a dev kit (I did). I don't feel like I donated — I feel like I got my money's worth.
- zyx321 13y ago
  A lot of people backed for the "change the world" promise: "Changing the way people experience video games forever." Of course nobody should be surprised if that turns out to be a bold-faced lie, but that doesn't mean it's not disappointing.
  - interpol_p 13y ago
    Did you personally back for the "change the world" promise?
drcode 13y ago
nay
noonespecial 13y ago
You are quite right, of course. But kickstarter is a brand new animal in the world of products and financing. There aren't any laws or even any concrete social norms around it yet. Perhaps people should "know better' but I'm not sure that's helpful. In the absence of laws or codified rules we should expect to fall back on manners. What Oculus did feels bad because its rude. At the very least, they should recognize that they are in uncharted territory. A bunch of random strangers gave them gifts because they believed in the vision. If that vision turns into a multi-billion dollar payday, they might consider giving a few gifts back to those kind strangers. Its not like they don't have a list of them all with contact info and everything. It would be polite to do so.
- avar 13y ago
  What do you mean there aren't any laws? You hand people money in exchange for their non-legally binding vague promises. This model of exchange has been around for hundreds if not thousands of years. Legally speaking Kickstarter is nothing new. If I meet someone on the street that promises me to try out some new idea and I give them money the courts aren't going to give me any more credence than someone who handed a $50 bill to a bum. How is this in any way a new and novel legal situation? The only thing that's new is that now due to the Internet more people have the ability to easily give out their money to potentially stupid initiatives.
  - noonespecial 13y ago
    In that reguard, its the same thing it's always been. A gift. Reciprocity is not required by law, only common decency. The new about kickstarter is it seems we're looking for something more than a gift, less than a regulated investment and not quite a sale. That's novel.
    - avar 13y ago
      Maybe you're looking for something more than a gift, but are you actually entitled to more than that? Are you a shareholder in these companies than you fund through Kickstarter? I think not. So why do you think you have any rights beyond someone who's donating money to a cause that may never pan out? It's perfectly fine to fund something through Kickstarter, but for some reason it seems that some people doing it think they're entering into a deal that isn't really there. Generally when you give money through Kickstarter you're giving it away without any string attached, only if the company pans out might you actually get some small gift, not a share of the profit. What's so hard to understand about that? The model's fine. The problem is that for some reason people donating to it think of themselves as shareholders, not donors.
InclinedPlane 13y ago
True. But back then there was no other option for crowd funding. That's only changing just now as the SEC is finally implementing the crowd funding provisions of the JOBS act.
- anigbrowl 13y ago
  Yeah, I'm surprised there hasn't been more discussion of that here, though obviously the slow nature of the rulemaking process causes people's interest to wane. Considering the fact that large acquisitions will continue in the future (even if we are in a bubble or unusually inflated period right now), and that even a micro-investment at the right time can lead to huge multiples, it'll be very interesting to see how this changes the landscape. Not being a game or graphics developer I was very interested in Oculus but decided to wait for the consumer version of the technology. However, if I could have bought a tiny equity position for $100 I would probably have done so, since I'm pretty confident on my judgment about which technology is 'hot or not,' and I would likely be celebrating a nice little uptick in my net worth right now.
  - InclinedPlane 13y ago
    Well, also, the SEC made the crowdfunding regulations a bit ridiculous so they may not actually end up having a major impact on investment funding.
    - anigbrowl 13y ago
      They can iterate. But also, they were working within some tight legislative constraints (eg $1m cap IIRC) and when you look at the public comments a lot of them 'how will you guard against grifters' and the like. I was pretty depressed by how vapid most of the comments were, incidentally...I feel bad for whoever was required to sit down and read and classify them all.
- GBond 13y ago
  Even so, KS was never about an exchange of equity for money (other platforms will fill this need like Angelist Invest). KS exchanges ownership in a project's human-level vision (and sometimes a early release of the product) for a donation. People are like Notch are peeved because Oculus was not upfront when entering this social contract.
bowlofpetunias 13y ago
Lot's of people agree with you. In crowdfunding circles, Kickstarter is considered a bubble that will burst hard when people realize they're funding companies in exchange for beads and trinkets. Sure there are plenty of projects for which the Kickstarter formula is perfectly valid. Funding companies isn't one of them, and that's where most of the money is. If that stops happening, Kickstarter's may not be enough to keep them afloat.
- thanatropism 13y ago
  To be fair, american government bonds have been ZIRPish since... You could invest in third world governments with interest rates that are too high for their S&P/Moody's/Fitch ratings. Look how revolutionary this idea.

bduerst 13y ago

It blows my mind how much people will throw their money at Kickstarter projects for the simple feeling of goodwill or novelty knick knacks (bumper stickers, buttons, etc). $10,000 should have bought some small amount of equity, even if it was only non-voting and non-dilutable.

pepon 13y ago
The problem with Oculus kickstarter project was that you were buying a dev kit, not a final product. So now they sell the company and you have a dev kit for a facebook product... and the final usage of the Oculus may be very different than the one you thought it was going to be when you purchased the dev kit. That cannot happen with other kickstarter projects that sell a final product like bumper stickers, buttons... In this case, the only difference with a normal purchase is that you buy the product before they manufacture it, so the startup avoids taking risks.
- joesb 13y ago
  What's the different? If the final usage of Oculus Rift is different once they sold the company to facebook, you are still going to get different final product if you buy/pre-order it via kickstarter.
burntroots 13y ago
I'm curious how you feel about open source, then. Specifically, node.js. Donating hours of your time working on something that eventually got sold for lots of money that you won't see a dime of. Sounds similar.
- akerl_ 13y ago
  Except if I'm a major contributor on an open source project, I A) get to shape software that I (generally speaking) am a consumer of, and B) can put that on my resume. Donating to a Kickstarter may give you some superficial "control" over project direction, but it's a far cry from open source, and it doesn't have the future career impact.

bnferguson 13y ago

As an early backer of the Kickstarter it's not my reaction at all. The Kickstarter was only about getting a single product delivered: the dev kit. Once they did that, any obligation they had to me was filled. Basically, that already danced with me. They're certainly free to move on to the folks with more money now.

vehementi 13y ago

I'll go ahead and dance with anyone for 2 billion dollars?

ShellfishMeme 13y ago

Isn't that a bit hypocritical? I bought the minecraft alpha from notch at an early stage because of promises of having a modding API added to it soon. Instead, lots of small insignificant features were added that I wanted nothing to do with. I felt they were bad for the game and only focused on short term popularity. Still, it seemed, they were beneficial for the long term growth of mojang, which was the main response to such criticism. So now notch is offended by a company he backed partly with the money he got from people like me, whose hopes of having a fully moddable open sandbox game made them invest, changing its strategy to allow them to reach a bigger market. I can directly relate to that, but I cannot say that I sympathize. This is what happens, when you invest in something when it's still in an early stage of finding itself. Bad luck, move on.