No IPO or equity funding for Kickstarter

Crowdfunding business wants to be an "institution for generations"

The CEO of Kickstarter has said the company has no intention of selling the business, as he intends to build the site as an "institution for generations."

Speaking at the GigaOM Roadmap conference yesterday, Perry Chen also stated there are no plans for Kickstarter to adopt equity crowdfunding, where backers could own a portion of the company they invest in.

"We think the most disruptive aspect is the removal of the investment component," said Chen, reports AllThingsD.

"People are supporting projects because they want to see them happen. It's so different than giving money because you want to make a profit."

Chen said the site is working hard to communicate what exactly Kickstarter is to make it easier to understand for backers. And he also reiterated last month's blog post about Kickstarter, where the founders made it clear that the site is not a traditional store.

"You're supporting somebody at a decently early stage, and you should understand that's what you're getting involved in," he said. "Delays are not infrequent. It's really about the creator setting the expectations for backers, and then if they have trouble, being very transparent."

More stories

"We need a real shift in the tide": Black professionals on representation in the UK

As the UK celebrates Black History Month, we speak to developers, players, ambassadors and more about racial equality in the games industry

By Aaron Lee

Blizzard vets form Frost Giant Studios

Tim Morten and Tim Campbell raise $4.7m in seed funding for real-time strategy game studio

By Brendan Sinclair

Latest comments (4)

Tim Carter Designer - Writer - Producer 7 years ago
If Kickstarter became an investment outlet, the SEC would come crashing down on it, anybody who wanted to use it would need to spend $50,000 and hire a team of lawyers to file a prospectus, etc, etc...

My only beef is that it isn't in Canada (yet). Probably that's because the Canadian government is, as usual, ponderous and slow in regulating it.
0Sign inorRegisterto rate and reply
Jonatan Crafoord Indie Developer, Really Interactive AB7 years ago
I applaud this. An IPO almost always means a complete refocus on profits, as it appears to be the only thing a multitude of investors can agree on. Keeping the company private allows it to maintain its vision and contribute to the overall good even when it is not apparently the most profitable path for the owners themselves.

The decision not to have equity crowd funding reflects this really. The concept is about commissioning and making ideas happen, not about monetary investments. Though money is necessary to keep a company afloat there is so much more that can be accomplished if greed is put aside, and I doubt Kickstarter is doing badly as an organically growing company.

Edited 1 times. Last edit by Jonatan Crafoord on 6th November 2012 5:32pm

1Sign inorRegisterto rate and reply
Well of course.

ATM they are making money hand over fist. why would they dilute their return?

When the inevitable failed-project backlash truly begins, it will be interesting to see what they might suddenly be willing to consider...
0Sign inorRegisterto rate and reply
Show all comments (4)
Nicholas Lovell Founder, Gamesbrief7 years ago
@Tim I'm not sure you are right. You are right that the SEC would need to be involved, but I understood the the new JOBS act contained legislation that made crowd-funding for profit allowable at a much lower scale than normal investment.

The argument: most wealth is created in startups in America, but we forbid anyone who isn't a a high net worth individual ($1m in liquid assets, I think) invest, while any bozo is allowed to blow $20k on roulette. Why not allow people to speculate in areas that are more likely to return them money AND help the economy.

I still think Kickstarter is right to avoid equity related schemes though
0Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.