4 ms·

To play devil's advocate let's do this from the perspective of the VC/Banker guys: 1) "Can we have $10 million to build the next wave of our watch?" 2) "Woah. T

To play devil's advocate let's do this from the perspective of the VC/Banker guys: 1) "Can we have $10 million to build the next wave of our watch?" 2) "Woah. There's a good chance AppleWatch will crush you. It's all anyone talks about. We'll lose our money and you'll waste 2 - 3 years of your life. Not sure it's a good idea" In the old days 3) was i) nothing happened as the VC guys feared risk or ii) They did lend/invest but with a lot of risk built in to the terms to reflect the uncertainty. Now 3) = "Let's put it on Kickstarter. That way both of us don't need to guess - we'll just know. If you get $x million of pledges we're happy to give you $y cash at $z valuation" Seems like everyone can win?

sliverstorm 12y ago
I wonder if it isn't more like, now 3) = "Let's put it on Kickstarter and let ordinary blokes who don't know any better fund us instead". It's just all-around suspicious when a product you'd expect to be able to get traditional funding, is listed on Kickstarter instead.
- TeMPOraL 12y ago
  From seeing attitudes of friends doing hardware startups, no, the GP's 3) was accurate. Kickstarter is now a marketing and product/market fit evaluation tool. A friend of mine is halfway through his Kickstarter now and he directly told me that he doesn't expect much more than breaking even on it - the whole point is a) marketing and b) greater chance to get new investors on board, because that's where the real money is. And, while I'm not sure of that, I suspect it's their current investor who suggested that Kickstarter campaign.
DenisM 12y ago
How exactly do VCs win when the company crowd-raises $6m? Seems to me they make exactly $0 and receive 0% of equity, because they are not involved at all.
- themartorana 12y ago
  Except there are already VCs in the equation, so any profitability helps them. It also doesn't dilute their shares, and they don't have to decide if they should risk doubling down on the second round. If I were a VC, this would definitely help validate my investment while requiring a total input of about zero from me. What business gets all the cash up front!!?
- jusben1369 12y ago
  All VC's (at this stage of a company's life) want to see sales before they'll invest. These are the sales. I think Pebble wants a heck of a lot more money than $6m to compete with AppleWatch.

sliverstorm 12y ago

I wonder if it isn't more like, now 3) = "Let's put it on Kickstarter and let ordinary blokes who don't know any better fund us instead". It's just all-around suspicious when a product you'd expect to be able to get traditional funding, is listed on Kickstarter instead.

TeMPOraL 12y ago
From seeing attitudes of friends doing hardware startups, no, the GP's 3) was accurate. Kickstarter is now a marketing and product/market fit evaluation tool. A friend of mine is halfway through his Kickstarter now and he directly told me that he doesn't expect much more than breaking even on it - the whole point is a) marketing and b) greater chance to get new investors on board, because that's where the real money is. And, while I'm not sure of that, I suspect it's their current investor who suggested that Kickstarter campaign.

DenisM 12y ago

How exactly do VCs win when the company crowd-raises $6m? Seems to me they make exactly $0 and receive 0% of equity, because they are not involved at all.

themartorana 12y ago
Except there are already VCs in the equation, so any profitability helps them. It also doesn't dilute their shares, and they don't have to decide if they should risk doubling down on the second round. If I were a VC, this would definitely help validate my investment while requiring a total input of about zero from me. What business gets all the cash up front!!?
jusben1369 12y ago
All VC's (at this stage of a company's life) want to see sales before they'll invest. These are the sales. I think Pebble wants a heck of a lot more money than $6m to compete with AppleWatch.