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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

#51

Post by tibbon »

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.

But do keep in mind that the backers did bear risk- there is a significant chance that any Kickstarter project doesn't turn out, because Kickstarter shouldn't be thought of as a 'store to buy things'.

Risk is exactly what investors bear in exchange for a potential return. Companies require investment because they don't have the capital to get things moving upward otherwise, which is exactly the need that Kickstarer fulfills.

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

#52

Post by phantomb »

kevingadd wrote: post #30
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.

According to the article a majority of the backers and a significant majority of the money was at or above the $300 mark

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

#53

Post by asdfologist »

alexqgb wrote: post #42
asdfologist wrote: post #34

Earlier quoted context omitted.

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

Actually, the dude (heavily) edited his original post after a bunch of people pointed out that he didn't know what he was talking about.

Oh I see. This highlights an interesting flaw in the HN edit functionality - it can make the child posts look stupid.

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

#54

Post by phantomb »

daemin wrote: post #43

So perhaps the answer is for Kickstarter to not allow any sort of companies to be funded, but rather only keep it for once off art projects...

I understand that's what the Kickstarter team is most interested in. But what would that accomplish besides causing all the companies to simply move to the next crowd-sourcing site?

If Kickstarter doesn't want a cut of that money I'm sure Indiegogo will be happy to take it

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

#55

Post by gfodor »

dlp211 wrote: post #47
gfodor wrote: post #9

Earlier quoted context omitted.

I think this would be the idea. If there was even an option for equity, the entire sentiment of a quick flip changes. It becomes less about the company exploiting you and more about you not having enough faith to buy a few shares in addition to the prototype. People right now currently feel akin to a benefactor who put a kid through college only to have the kid turn their back on them down the road once they're succe…

And that is a stupid way to feel. Using your kid analogy, they didn't turn their backs on anyone, they took a better paying gig so that they can do more stuff for you. So that they can get you a quicker ROI by having more assets at their disposal, by being legitimized. I don't understand any of your reactions to this. They took money, and so what? For a site that is dedicated to the entrepreneurial spirit, making it…

Most of the biggest tech companies we respect today started with a lot of potential, a lot of risk, and offers for early exits that would have made the founders rich. The founders believed enough in themselves and their vision to tell these people to go fuck themselves, they were going to go their own way. The reason people react negatively to this is because they see huge potential in Oculus and don't feel Facebook has the incentives to execute on VR the way Oculus was poised to, especially now that the founders/execs effectively have lost their ability to control the company (PR statements notwithstanding.)

Honestly, it feels that for all the talk about the huge future of VR by Oculus, if they really believed in it, no number would be big enough to get them to give up control of how that future is built. Most entrepreneurs who are in the business of changing the world are not that interested in relinquishing any control to someone else no matter how much that will get them paid.

I'm pretty sure I know what the deal is here, that Facebook basically told them that they can take their investors out of the picture and have the full resources to build the best consumer product they want to with custom hardware. This certainly would sound enticing but the problem is that as soon as the going gets tough that lack of absolute control is going to start to rear its head. Zuck is going to have the final call on everything, and when the VR wars heat up you can be sure he is going to make different decisions than an independent Oculus would.

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

#56

Post by anigbrowl »

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…

This has been explained to you about 100 times already, why not start with your best argument instead of pretending the question has never been asked before? For the record I support raising equity through things like Kickstarter and lowering the accreditation threshold for small investments, but you're being extremely disingenuous here.

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

#57

Post by rtpg »

GBond wrote: post #33
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.

what about the product they bought?

I don't expect financial payout from a McDonald's franchisee because I bought some hamburgers from them.

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

#58

Post by anigbrowl »

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?

It's better to address the problem directly (investor eligibility) rather than trying to invent technological end-runs around it, because the law is not deterministic and such technological instrumentalities are very transparent to regulators..

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

#59

Post by daemin »

phantomb wrote: post #54
daemin wrote: post #43

So perhaps the answer is for Kickstarter to not allow any sort of companies to be funded, but rather only keep it for once off art projects...

I understand that's what the Kickstarter team is most interested in. But what would that accomplish besides causing all the companies to simply move to the next crowd-sourcing site? If Kickstarter doesn't want a cut of that money I'm sure Indiegogo will be happy to take it

It's a tough question Kickstarter might ask itself, but then again since it gets a cut of all the funding that comes through it, why would it want to stop (over)funding these company projects. I think at this stage it won't change unless it is forced to from a third party.

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

#60

Post by anigbrowl »

martinald wrote: post #15
general_failure wrote: post #4

Earlier quoted context omitted.

Kickstarter needs a no-acquisition clause

I don't think that would work. It would seriously diminish the possibility of kickstarter-based companies ever raising crowd funded funding.

But most people go to Kickstarter to fund the development of a particular product, not to boost the corporate entity that produces it. I mean, it's not that Kickstarter buyers are against people earning a living and making a profit, but something like 9 out of 10 Kickstarter projects are 'labor of love, we want to make it accessible to you as cheaply as possible,' as opposed to 'we want to build up a lot of buzz and then have a ginormous exit/IPO/get rich beyond your wildest dreams.'
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