When Facebook bought virtual reality headset startup Oculus VR for $US2 billion ($A2.15b), it took most people by surprise. It also angered many of the early supporters of the startup, who backed the game on Kickstarter but were not happy with news Facebook had acquired it. The Oculus CEO said they anticipated a backlash from their core audience, but they were shocked at how extreme some of it went. Founder Palmer Luckey posted a comment in a Reddit stream about the backlash: “We expected a negative reaction from people in the short term, we did not expect to be getting so many death threats and harassing phone calls that extended to our families. We know we will prove ourselves with actions and not words, but that kind of shit is unwarranted, especially since it is impacting people who have nothing to do with Oculus.” This Reddit stream details the many of the concerns about the impact the partnership could have on the experience of using Oculus. The company raised $2.4 million from on the crowdfunding platform before taking $16 million from investors, followed by a further $75 million leading venture capital firm Andreessen Horowitz. Part of what Kickstarter and crowdfunding campaigns thrive on is the engagement and sense of ownership backers get. As equity crowdfunding takes off, this sense of ownership is likely to continue to be a source of friction, according to Jeremy Colless, a managing partner of Australian online equity crowdfunding platform VentureCrowd. “At first glance I think it is easy to dismiss the Kickstarter backers of Oculus Rift as being disingenuous, they paid for a product and received it,” Colless told StartupSmart. “But their frustration isn’t entirely misplaced, as startups have definitely been exploiting crowdfunding platforms as a cheaper and potentially more accessible alternative to raising equity capital from equity investors.” Crowdfunding campaigns are increasingly used by emerging businesses to get customer validation, exposure and funds to get started. But the backers have no leverage to demand a better deal. But as its close cousin crowdfunded equity gathers momentum, customer expectations are likely to change. If early backers received equity in an idea, there is little doubt supporters, such as those who backed Occulus VR, would be disappointed. “The irony of the situation is that as a crowd, the Kickstarter backers could easily demand a greater return for their combined capital contribution,” Colless says. Greater return ideas could include more significant discounts to a tiny pool of equity set aside for early backers to reward them for support.
A number of new start-ups have likened themselves to US-based company Airbnb, the leader in travel rentals, which has booked more than 10 million nights of accommodation worldwide.
Famed US venture capitalist Marc Andreessen has taken aim at the ‘lean’ start-up model, claiming that it overlooks the importance of sales and marketing and gives entrepreneurs “permission to give up very fast”.
Australia has more than 12 million Facebook users, but when it comes to reaching them, a handful of businesses are doing far better than the rest.
I'm writing this week from the University Cafe in downtown Palo Alto.
US-based social coding start-up GitHub has finally raised its first round of funding after years of resistance, closing a $100 million funding round from venture capital firm Andreessen Horowitz.
Venture capital fundraising in the United States fell 35% in the first quarter of 2012, according to the National Venture Capital Association, but an expert insists investment is as strong as ever.
Stanford University and VC firm Andreessen Horowitz have launched a start-up generator titled Founder Soup, whereby entrepreneurs pitch their ideas in a bid to recruit co-founders.
US-based start-up program NewME Accelerator has secured venture capital firm Andreessen Horowitz as a sponsor, joining the likes of Google, HP and social networking site Tagged.
US-based venture capital firm Andreessen Horowitz has teamed up with start-up incubator Y Combinator, promising to contribute $50,000 of the $150,000 awarded to every Start Fund participant.
Vacationers in the United Kingdom who hate the idea of trying to secure a spot in a busy campsite are being encouraged to pitch a tent in a stranger’s garden.
Local tech entrepreneur Matthew Ho has become the first Australia-based hire of travel web service Airbnb as the US-based parent company reportedly prepares to close a $100 million funding round, and US actor Ashton Kutcher invests a "significant amount" in the business.