Attention Suckers: Please Send Us Your Money
Instead they got T-shirts or prototype headsets depending on how much they contributed.“Those almost 10,000 early investors on Kickstarter participated in one of history’s most lucrative funding rounds from the perspective of the people receiving the funding: a $2.4 million early-stage investment in what would become a $2 billion business in a year and a half, in return for 0.0% equity.”
I don't think it's really a scam though. The funders knew they weren't getting any equity, and who could have foreseen that a $2 million dollar initial funding could be turned into $2 billion in just a year? Talk about frothy. I think we must be in another tech bubble.What did the KickStarter funders of Oculus get? Note I use "funder" and not "investor," because investors have a potential for an investment return. These funders, who backed the company three months after the JOBS Act passed, did not. As the Journal noted, they were promised “a sincere thank you from the Oculus team.” And, for $25, a T-shirt. For $300, the dangle of “an early developer kit” including a prototype headset. Total money raised: $2.4 million from 9,500 contributors.
Talking people out of $2.4 million dollars in exchange for zero percent equity is a perfectly legal scam. Then selling the company for $2 billion dollars is simply how this particular crowdfunding works.
If the founders had gone to a venture capitalist instead of crowd funding, the venture capitalist would certainly have made a killing on the deal. The guy seems to be ranting about something that isn't really a problem. He's mad that speculators (or investors or capitalists if you prefer) didn't get a cut of the action. Maybe he's just jealous because none of his ideas are worth $2 billion. And in truth, this idea may not really be worth $2 billion either. You just have a bunch of Silicon valley companies like Facebook, Google and Apple with enormous piles of cash to throw at anything new that might turn into something.