Oculus Acquisition Breaks Kickstarter

3/26/2014 Stephen Colbert 0 Comments


So far, the first quarter of 2014 has been defined by tech giants buying startups like candy.  From Google's acquisition of Nest, to Facebook's recent purchase of WhatsApp.  Well, Facebook just opened the checkbook again, this time to purchase the Kickstarter born virtual reality headset maker, Oculus VR, for $2 billion.

You will find plenty of differing opinions on the internet about the acquisition.  All have validity.  Virtual Reality has massive social networking implications.  A Facebook purchase makes sense.  A Facebook acquisition also kills the indy vibe Oculus had going for it.  Backers should be mad.

Whether the purchase is good or bad will be seen down the road, but one thing is for sure:  Acquisitions of this type significantly effect the way people view Kickstarter campaigns in the future.

Kickstarter is very clear about what backers should expect in their Kickstarter 101 section.

Project creators keep 100% ownership of their work, and Kickstarter cannot be used to offer equity, financial returns, or to solicit loans.
The Oculus team owned Oculus and had the right to do with it as they please.  Kickstarter backers are owed nothing.

Kickstarter does not guarantee projects or investigate a creator's ability to complete their project.
However, all the Kickstarter backers that participated in raising $2.5 million in funding were paying to help realize a vision.  The Oculus Kickstarter page said that Oculus would be "designed for gamers, by gamers" and encouraged backers to "Join the development process and make your voice heard."

I did not back the Oculus Rift, but I can imagine why many backers would be mad.  One of the larger backers, Markus Persson (creator of Minecraft), put it pretty succinctly on his blog:

I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition.
Not only are Kickstarter backers being denied the vision they donated to bring about, but their money and support (including hours put in by developers) served directly to aid in a $2 billion Facebook acquisition, of which, no backers will receive a penny.

It's not about the money, though.  Most backers were never expecting anything in the first place, but it's likely that many would have though twice before lending financial support if Oculus stated on its campaign page that it was open to acquisition by a company like Facebook down the road.

Kickstarter isn't likely to go anywhere and crowd-funding will likely remain popular, but don't be surprised to see Oculus backers being a little less generous in the future.

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