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Kickstarter: No Equity Crowdfunding or IPO For Us
editorial

Kickstarter: No Equity Crowdfunding or IPO For Us

For much of its short existence, Kickstarter's own success (and the overall success of crowdfunding) has pushed it in directions the platform's founders never saw it heading.

Created as a platform to raise funds for mostly arts-related projects, Kickstarter has become a de facto marketplace for all sorts of unique consumer products over the past year, prompting a declaration from the company that "Kickstarter is not a store." New rules followed, and this week co-founder Perry Chen cleared up a few other issues of speculation, namely that Kickstarter has no plans for an IPO, or to embrace crowdfunding for equity under the JOBS Act when it is implemented (which could be as soon as 2013).

“We don’t ever want to sell this company, we don’t ever want to IPO. We want to build this institution for generations,” Chen said at a GigaOM event in San Francisco.

Chen also touted the transformative power of Kickstarter as a fundraising mechanism, but drew a clear line in the sand on the question of opening things up to investors looking for an equity stake in a startup or other project.

“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.”

Perhaps the next biggest player (or at least most recognized) in the crowdfunding game in the United States, Indiegogo, has drawn no such line when it comes to opening up to equity. The platform has made noise about the possibility of allowing equity investments for projects in Europe where the practice is already legal, and last month CEO Slava Rubin spoke about crowdfunding's expanding sphere of influence in a keynote speech at CrowdConf.

Indiegogo has made a name for itself by being open to all sorts of crowdfunding projects while Kickstarter prefers a curated approach. Chen's comments and Kickstarter's actions in recent months seem to suggest that the biggest crowdfunding platform sees internal control as a key to its future, will others are more willing to let the crowd run wild.

You can watch the full Gigaom interview with Chen below:

 

 

 

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  • Guest Jack Quick Nov 07, 2012 03:07 pm GMT

    From my perspective, it is more than just a little confusing to refer to the upcoming equity-based funding portals mentioned within the JOBS Act of 2012 as “Crowdfunding sites”. When I think of the term “Crowdfunding”, I immediately connect it with donation based fundraising, with a gift or product of some sort sent to the funder by the funded party (like Kickstarter, for example).

    Since there will be both donation based fundraising sites and equity-based fundraising sites once the SEC sets forth the rules for the JOBS Act of 2012 sometime next year, we will need an easy way to distinguish one from the other. Crowdfunding is the catchy name for donation based fundraising. So, what word or short, catchy term do we use to spice up “Equity-Based Fundraising”?

  • Guest Elliott Dahan Nov 09, 2012 01:06 am GMT

    Have the folks at Kickstarter told the VCs and Angels who gave them $10million that there will be no IPO ?

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