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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

#31

Post by refurb »

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.

In a perfect world, it would make sense to let people tell everyone "buyer beware".

However in reality, some people do need protecting and the easiest way to do it is to "protect" everyone.

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

#32

Post by ama729 »

yeukhon wrote: post #25
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 w…

> 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.

You don't back a project just to get the perks though most of the time, you back a project to support a company grow and thrive.

IMO they clearly broke the social contract between them and the backers.

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

#33

Post by GBond »

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…

The real shame is not that the backers didn't a get a financial payout ('tho they should). The real shame is how Oculus' most passionate enthusiasts got burnt. They were in it for the shared vision but got a tough lesson in capitalism instead.

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

#34

Post by asdfologist »

alexqgb wrote: post #7
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…

Kickstarter specifically prohibits equity deals with backers, as allowing them would place them in the crosshairs of the SEC. FYI.

Wow, you just missed the entire point of his post.

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

#35

Post by yeukhon »

ama729 wrote: post #32
yeukhon wrote: post #25

Earlier quoted context omitted.

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 w…

> 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. You don't back a project just to get the perks though most of the time, you back a project to support a company grow and thrive. IMO they clearly broke the social contract between them and the backers.

I don't dispute they want the final product in the end. They agree with Oculus' vision so they back them up. But why are people feel upset?

Two reasons:

1. Some people feel they are entitled to share the acquisition because without their early support (via KS crowdfunding) Oculus may never get that $2B acquisition, or/and

2. They dislike the acquisition and they feel entitled to have a voice. Like public trading companies shared holders should have a say in the company's direction and the company is responsible to maximize shareholders' profit

Either one or combined.

If the deal is clear from day one, which is that you, the backer, will only receive the perk as promised, and any penny you give to the project will be used to keep the project growing. But you don't have any say in the project, because, they never said they will let you be a shareholder. They are not going to discuss acquisition with you, because, this is a private company. Fan support is essential to keep a project like this growing. But business is business. If you think you are better off with some extra $$ in your pocket and getting a powerful parent looking after your project at the same time, you probably should take the acquisition.

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

#36

Post by ynd »

yeukhon wrote: post #25
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 w…

I think the kickstarter backers are really both investors and customers. They are investors because they do take a risk by paying for a product that doesn't yet exist. This leap of faith from these "customers" allowed Oculus to create a 2 billion dollar product.

People are mad because funding the project through kickstarter created some expectations that were not met. Funding through kickstarter feels like you're investing in grassroots human projects, but this made people realize that it's really just business as usual.

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

#37

Post by sparkzilla »

general_failure wrote: post #4
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…

Kickstarter needs a no-acquisition clause

I think you mean it needs a "No acquisition by Facebook" clause.

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

#38

Post by [deleted] »

EpicEng wrote: post #24
shiftpgdn wrote: post #17

Earlier quoted context omitted.

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.

[deleted]

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

#39

Post by tim333 »

refurb wrote: post #29
gojomo wrote: post #26

Earlier quoted context omitted.

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 any…

Apparently historically many of the rules came about during the early 20th century US oil boom. Guys used to go door to door selling shares in can't go wrong oil stocks and then not only did some wells not work but often there were no wells at all and the insiders just stole the money. There was political outcry so laws were passed to stop selling direct to small investors. The rational to allowing wealthy investors to punt is that a) they can afford to lose, or at least do so quietly without causing a political stink, and b) can afford professional advice and get their accountant to have a look and so on. Investor protection laws are still useful - there are plenty of scammers out there - but I think could be updated. For example the government could have lawyers and accountants at least check out the money was being invested in a business and not just paid out to the insiders. In the UK we have some equity crowd funding which seems to kind of work.

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

#40

Post by tim333 »

forrestthewoods wrote: post #28
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.

I think a lot, probably most companies on Kickstarter would be ok giving 10% of equity to their backers if it was legal.
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