Kickstarter a scam?

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Kickstarter a scam?

Post by Anaxagoras » Wed Mar 26, 2014 2:51 pm

Not an illegal scam mind you. A perfectly legal way to part fools and their money:

Attention Suckers: Please Send Us Your Money

“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.”


Instead they got T-shirts or prototype headsets depending on how much they contributed.

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.


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.

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.
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Re: Kickstarter a scam?

Post by Abdul Alhazred » Wed Mar 26, 2014 3:09 pm

It's not a scam, in that there was no misrepresentation.

Virtual reality, eh?

A lot of people want to live in a Philip K Dick dystopia, and are willing to donate to that end. :coolspecs:
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Re: Kickstarter a scam?

Post by Rob Lister » Wed Mar 26, 2014 3:13 pm

I never understood it for that very reason; I could never find the line for equity.

I've seen some good ideas presented there, but what possible reason would I have to 'invest'? The novelty of it? A t-shirt? Get real.

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Re: Kickstarter a scam?

Post by Anaxagoras » Wed Mar 26, 2014 3:17 pm

Rob Lister wrote:I've seen some good ideas presented there, but what possible reason would I have to 'invest'? The novelty of it? A t-shirt? Get real.


Philanthropy?
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Re: Kickstarter a scam?

Post by Abdul Alhazred » Wed Mar 26, 2014 3:24 pm

Fighting the good fight against sexism in 30 year old video games? :BigGrin3:
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Re: Kickstarter a scam?

Post by Rob Lister » Wed Mar 26, 2014 3:30 pm

Anaxagoras wrote:
Rob Lister wrote:I've seen some good ideas presented there, but what possible reason would I have to 'invest'? The novelty of it? A t-shirt? Get real.


Philanthropy?


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Re: Kickstarter a scam?

Post by Nyarlathotep » Wed Mar 26, 2014 9:04 pm

Rob Lister wrote:I never understood it for that very reason; I could never find the line for equity.

I've seen some good ideas presented there, but what possible reason would I have to 'invest'? The novelty of it? A t-shirt? Get real.


I have participated in a couple of kickstarters. Always for two reasons

1) because I was really interested in seeing the product come out

2) because I wanted a copy of the product for myself (so I always chip in at a level that gets me that)

In short, I don't see it as an 'investment' as much as a pre-order, with some risk and maybe some extra perks. I never expected to make any money and have always gotten exactly what I expected (thus far). So like Abdul said, no expectation of making money thus not a scam.
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Re: Kickstarter a scam?

Post by DrMatt » Wed Mar 26, 2014 10:01 pm

Kickstarter allows fairly poor people to easily take part in a campaign. It's ORGANIZED CHARITY, DUH!
The bar to taking part in a campaign as an investor is a lot higher than you think.
There's nowhere where it says that giving money to a campaign entitles you to own it.
But those who have spent their whole lives making money off having money without doing anything or making anything might think they're being cheated by such a scheme.
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Re: Kickstarter a scam?

Post by corplinx » Wed Mar 26, 2014 10:37 pm

They got what they were offered. A t-shirt.

qq

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Re: Kickstarter a scam?

Post by Nyarlathotep » Wed Mar 26, 2014 11:49 pm

Another thing too, is that something like Oculus RIft is an exception on Kickstarter. Most projects are small time things that are never expected to be huge cash cows in the first place. I doubt Berkshire-Hathaway is going to be terribly interested in funding a small company that makes fancy schmancy dice for gamers or a reboot of the Traveller RPG. Things like that wouldn't make back near enough money to attract the big boys. But both of those projects were able to find a few thousand people who were willing to pre-order some dice or a rulebook and maybe get a T-shirt or something on top of that. So the article in the OP not only comes across as being a whiney rich dude crying over the fact that there exist pies he doesn't have his finger in, it's nonsensical since for 99%+ of the projects on Kickstarter, his ilk would have turned their nose up at the pie anyway.
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Re: Kickstarter a scam?

Post by Pyrrho » Thu Mar 27, 2014 12:26 am

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Re: Kickstarter a scam?

Post by Anaxagoras » Thu Mar 27, 2014 9:28 am

Nyarlathotep wrote:Another thing too, is that something like Oculus RIft is an exception on Kickstarter. Most projects are small time things that are never expected to be huge cash cows in the first place. I doubt Berkshire-Hathaway is going to be terribly interested in funding a small company that makes fancy schmancy dice for gamers or a reboot of the Traveller RPG. Things like that wouldn't make back near enough money to attract the big boys. But both of those projects were able to find a few thousand people who were willing to pre-order some dice or a rulebook and maybe get a T-shirt or something on top of that. So the article in the OP not only comes across as being a whiney rich dude crying over the fact that there exist pies he doesn't have his finger in, it's nonsensical since for 99%+ of the projects on Kickstarter, his ilk would have turned their nose up at the pie anyway.


Well said.
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Re: Kickstarter a scam?

Post by Abdul Alhazred » Thu Mar 27, 2014 2:15 pm

Kickstarter is a spiritual battlefield.

http://www.polygon.com/2014/3/25/549639 ... with-satan

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Re: Kickstarter a scam?

Post by DrMatt » Thu Mar 27, 2014 5:08 pm

But it's the free market, dammit, Jim!
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Re: Kickstarter a scam?

Post by Abdul Alhazred » Thu Mar 27, 2014 5:28 pm

DrMatt wrote:But it's the free market, dammit, Jim!


Free enough until malign spiritual influences ... ummmmm ... influence it. :notsure:
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Re: Kickstarter a scam?

Post by Anaxagoras » Sat Mar 29, 2014 2:30 am

Did Facebook overpay?

Investors seem to think so:

Zuckerberg Loses $3 Billion in a Week as Tech Titans Fall

The world’s largest social network plummeted 11 percent after the company announced it would buy virtual-reality firm Oculus VR Inc. for at least $2 billion.


Considering the Market Cap of Facebook is over $150 billion, it seems like a bit of an overreaction unless you think it's going to become a pattern for Facebook to fritter away its money on speculative acquisitions like this which may or may not pan out.

Is Wall Street telling Facebook they're being stupid?

The article does point out that Facebook wasn't the only tech company to lose ground this week: Google and Amazon were also down, and maker of Candy Crush had an underwhelming IPO. So maybe it's not all on this acquisition of the VR company, but probably much of it is.
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Re: Kickstarter a scam?

Post by JasonAristotle » Thu Apr 17, 2014 6:59 pm


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Re: Kickstarter a scam?

Post by hammegk » Thu Apr 17, 2014 7:43 pm

first, fuckwit

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Re: Kickstarter a scam?

Post by Miles » Thu Apr 17, 2014 10:12 pm

No. It depends on those utilizing it as a source of funding.
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Re: Kickstarter a scam?

Post by Doctor X » Thu Apr 17, 2014 11:04 pm

Airwrecka certainly is, as is his sockpuppet Miles.

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