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Aug. 1, 2012: When Oculus Asked for Donations

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Re: Aug. 1, 2012: When Oculus Asked for Donations

#21

Post by pmorici »

icpmacdo wrote: post #13
modeless wrote: post #2

This is the real shame in the Oculus acquisition. If Oculus had been able to give away just 10% equity, every single Kickstarter backer would be $20,000 richer today. The sentiment would be completely different. The SEC needs to get in gear and start allowing equity crowdfunding pronto. The SEC's classification of millionaires as "accredited investors" who get first crack at all the best investment opportunities is e…

If a crowd funding website that was completely bitcoin based would it be able to avoid all SEC regulations? If there are regulations in the future is there a liability to creating this now?

No, There used to be 3 difference BTC denominated securities exchanges, Havelock, BitFunder, and some other one I can remember the name of. They were mostly based out of Canada then some regulators forced two of them to close and Havelock moved to a country in central America to avoid the same fate.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#22

Post by loceng »

modeless wrote: post #2

This is the real shame in the Oculus acquisition. If Oculus had been able to give away just 10% equity, every single Kickstarter backer would be $20,000 richer today. The sentiment would be completely different. The SEC needs to get in gear and start allowing equity crowdfunding pronto. The SEC's classification of millionaires as "accredited investors" who get first crack at all the best investment opportunities is e…

Would they really have offered equity though? I don't know.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#23

Post by EpicEng »

modeless wrote: post #20
refurb wrote: post #14

Earlier quoted context omitted.

The reason for the accredited-investor regulation was to prevent people from putting all of their wealth into risky investments they know nothing about and being left destitute. People on HN are pretty smart, but it's not representative of the entire population. People get scammed by ridiculously obvious scams. Do you really think they have the ability to invest in a start-up in an intelligent way?

Nobody becomes destitute after funding a failed Kickstarter project because the amounts are small. That doesn't need to change. Limits could be in place. What needs to go is the $1,000,000 threshold for getting any equity at all.

The grandparent was explaining why these laws exist in the first place. Yes, perhaps they should change to accommodate new modalities, but that doesn't happen quickly (nor should it.)

Re: Aug. 1, 2012: When Oculus Asked for Donations

#24

Post by EpicEng »

shiftpgdn wrote: post #17
refurb wrote: post #14

Earlier quoted context omitted.

The reason for the accredited-investor regulation was to prevent people from putting all of their wealth into risky investments they know nothing about and being left destitute. People on HN are pretty smart, but it's not representative of the entire population. People get scammed by ridiculously obvious scams. Do you really think they have the ability to invest in a start-up in an intelligent way?

I know it's a bit of a libertarian viewpoint but it is not the government's job to be my nanny. If I wish to throw all of my money down the toilet on some hopeless start-up I should be allowed to do so.

I would tend to agree in spirit but, of course, no one wants to throw their money away, they get tricked into doing so. Government does have an interest in the livelihood of its citizenry.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#25

Post by yeukhon »

modeless wrote: post #2

This is the real shame in the Oculus acquisition. If Oculus had been able to give away just 10% equity, every single Kickstarter backer would be $20,000 richer today. The sentiment would be completely different. The SEC needs to get in gear and start allowing equity crowdfunding pronto. The SEC's classification of millionaires as "accredited investors" who get first crack at all the best investment opportunities is e…

I don't get the sentiment, those who feel they have been betrayed.

First Oculus gave out the perks they promised to deliver, haven't they? That's the whole deal with backers. You back a project and you should receive the promised perk in return.

Another way to look at backer is to think of them as your first set of customers. I don't see why Oculus should return equity even if KS allows them to do so.

If the option was "give us $10,000 and you get 0.1% of the equity then would we still have this discussion. Obviously not. But the contract these backers signed up for was just the perk.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#26

Post by gojomo »

refurb wrote: post #14
gojomo wrote: post #6

Earlier quoted context omitted.

Indeed, I don't see anywhere else that Americans accept a "wealth test" to exercise a basic economic right (ownership of production). Note, the accredited-investor rules are not an "ability-to-pay" test. That would be fair: if you can write the check, you're in. The rules also are not a creditworthiness test: they don't evaluate reliability, and investors want to give money, not take it from others. And they're not a…

The reason for the accredited-investor regulation was to prevent people from putting all of their wealth into risky investments they know nothing about and being left destitute. People on HN are pretty smart, but it's not representative of the entire population. People get scammed by ridiculously obvious scams. Do you really think they have the ability to invest in a start-up in an intelligent way?

Then why aren't there limits on lottery ticket purchases, or casino gambling, or making highly-leveraged real-estate purchases, or buying any number of other investments (including public stocks and options) that can send any initial amount of money to zero, quite rapidly?

It's an archaic set of rules, from a dumber era, and totally out-of-sync with what people are capable of, and what real risks to "all of their wealth" exist today.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#27

Post by mehwoot »

Well you can't have it both ways. If you put your money in on kickstarter and expect to get a product in return, you have bought the product. You didn't invest.

Of course, how much people who put money into things on kickstarter expect to get a product versus how much risk they are expecting to take is an open question.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#28

Post by forrestthewoods »

modeless wrote: post #2

This is the real shame in the Oculus acquisition. If Oculus had been able to give away just 10% equity, every single Kickstarter backer would be $20,000 richer today. The sentiment would be completely different. The SEC needs to get in gear and start allowing equity crowdfunding pronto. The SEC's classification of millionaires as "accredited investors" who get first crack at all the best investment opportunities is e…

Don't be ridiculous. That's not how it works. Every dollar, and then some, needed to be spent on the headsets. Oculus wasn't going to give away 10% of the company in exchange for negative dollars.

If the SEC does allow equity via crowdfunding you'd have to be relatively insane to take them up on the offer. It just doesn't make sense.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#29

Post by refurb »

gojomo wrote: post #26
refurb wrote: post #14

Earlier quoted context omitted.

The reason for the accredited-investor regulation was to prevent people from putting all of their wealth into risky investments they know nothing about and being left destitute. People on HN are pretty smart, but it's not representative of the entire population. People get scammed by ridiculously obvious scams. Do you really think they have the ability to invest in a start-up in an intelligent way?

Then why aren't there limits on lottery ticket purchases, or casino gambling, or making highly-leveraged real-estate purchases, or buying any number of other investments (including public stocks and options) that can send any initial amount of money to zero, quite rapidly? It's an archaic set of rules, from a dumber era, and totally out-of-sync with what people are capable of, and what real risks to "all of their wea…

Well, for lottery tickets and casino gambling, people understand it's gambling (a game of chance). If someone came up to you and said "Give me $100K and I'll double it by the end of the year by gambling" nearly everyone will think "that's high risk!".

You can lose all your money doing real-estate deals or buying stocks, but those are regulated financial activities. Basically the gov't is saying "I don't want just anyone buying a private company, but I'm OK with allowing them to purchase equity in a public company because those companies are forced to be transparent."

Note: I'm not defending the law, just trying to explain the rationale for it.

Re: Aug. 1, 2012: When Oculus Asked for Donations

#30

Post by kevingadd »

cookingrobot wrote: post #5

For $300 those backers got the promise of an awesome VR headset. I don't see why they should get equity for free on top of that. It would be nice if kickstarter campaigns could add equity as and option in the reward tiers, but it's not like these people gave their money for nothing in return.

You're assuming every backer paid 300. Some donated more, some paid less.
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