When you give money to a Kickstarter, do its creators owe you anything beyond the rewards that were promised? Is there an implicit understanding that those creators will stay scrappy and independent? Or can artists and designers do whatever they want once they have got your money?
Yesterday's news bombshell — Facebook buying the virtual reality company Oculus Rift for $US2 billion — has raised some interesting questions about the role of Kickstarter in a startup's success. After all, Oculus Rift began as a small group of garage developers hoping to crowdfund $US250,000. The company might not be where it is today if not for those 9,522 Kickstarter backers, none of whom get to see a cent of Facebook's $US2 billion, unless they happened to get their hands on some equity.
It's always been clear that funding a project on Kickstarter is more donation than investment — there's no financial return, and no legal recourse if someone takes your money and runs — but we've never seen anything on this scale before. Without that Kickstarter money, Oculus might have not been able to attract any of the venture capitalist funding they have been accumulating for the past two years, and without that VC backing, there might be no Facebook deal. So can you really blame Kickstarter backers who might feel like they missed out on something big here?
Gawker's Joel Johnson, who gave $US300 to Oculus, wrote down some nuanced thoughts over on Valleywag that are definitely worth reading . "I still feel as if circumstance removed me from an opportunity to turn my speculative belief in the future of VR and Oculus's role in it into real money," he wrote. "Their story — a genuine garage hacker does what billion-dollar companies would not — didn't imply its eventual end: that the barefoot, teenage founder would sell his startup to a giant technology corporation before they sold a single retail product. No injury, perhaps, but plenty of insult."
Meanwhile, on the Oculus Rift Kickstarter page, some backers are not pleased. Some are demanding refunds. "You selling out to Facebook is a disgrace," writes backer Sergey Chubukov. "It damages not only your reputation, but the whole of crowdfunding. I cannot put into words how betrayed I feel by this."
Some other reactions:
We've reached out to Oculus to get their perspective on all of this. It's the type of rags-to-riches story to keep in mind next time you back something promising — something that could be really big — on Kickstarter. You're not investing; you're donating. And for one perspective, to quote Sam Biddle over on Valleywag... "For me, it's now simple: post-Oculus, if you back a large Kickstarter project, you're a sucker."