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Has Anyone Told You Just How Evil Kickstarter Is? — Fredosphere
Barry Ritholtz of Bloomberg View wants you to know Kickstarter is evil—at least when corporations get into the act. Oculus, the virtual reality company recently bought by Facebook for a couple billion, received an infusion of $2.4 million early in its history thanks to a Kickstarter campaign. This kind of corporate funding became legal thanks to the JOBS Act of 2012.
Ritholtz does not like the JOBS Act:
Regardless of strenuous objections, the JOBS Act became law, making it all-too-easy for companies to raise money. It was more of the same radical deregulation that helped cause the financial crisis. This was not about making markets work more smoothly, but rather, an extreme form of “smash & grab” capitalism.
Let’s ignore the evidence that deregulation did not cause the financial crisis. Let’s ignore the lurid phrasing of “smash & grab”. Let’s cut to Ritholtz’s thesis:
[I]t’s not a fraud, it’s a scam. You see, fraud involves something where there is a violation of the law; no rules appear to have been broken here. This is how the JOBS Act is supposed to work: Let people make dumb decisions on their own, without any protection.
[…] These funders, who backed the company three months after the JOBS Act passed, did not. As the Journal noted, they were promised “a sincere thank you from the Oculus team.” And, for $25, a T-shirt. For $300, the dangle of “an early developer kit” including a prototype headset.
Okay, so here Ritholtz admits the fundamental fact: the Kickstarter funders got exactly what they were promised. For whatever reasons—dumb decisions, yes; or, just maybe, the thrill of advancing technology or simple altruism or maybe even flat boredom—the funders gave money expecting essentially nothing in return.
Yes, eventually, the company cashed in big. So what? It’s possible, quite likely in fact, that a good number of Oculus’ funders have no regrets. (That would be my reaction.)
So why is Ritholtz so sputteringly vexed over this outcome? Is this the green-eyed monster rearing its head again? Does every left-wing impulse spring from envy?
Not just envy, apparently, but also contempt:
My regulatory philosophy is simple: You humans need protection from yourselves, especially when money is involved (and the SEC agrees). Sure, you can operate heavy machinery and do complex verb conjugations, but when it comes to understanding anything involving capital, you are often no better than a 2-year-old. And that is before the red fog of greed begins to cloud your minds.
Good thing the green fog of envy cannot cloud Ritholtz’s mind. I do wonder, though, how these infantile investors will ever grow up if the wise nannies of the world forever save them from themselves.
Published in General
He’s got a point though, and it’s one I raised earlier. Uber, Kickstarter, InTrade, 23andMe, they all made fundamental challenges to established cartels, and the laws are written in favor of the cartels.
Uber? Taxi cartels. I’m betting they get squashed for “tax violations” or when someone gets hurt.
Kickstarter? Challenges the bankers, so naturally Congress weasels want to regulate it.
23andMe? Went after the FDA itself, doomed.
From the kickstarter page.
Most kickstarters are like this. You are actually preording the product so to speak. That one wasn’t a particularly great value at 35 bucks for a digital copy.
However I’m not one to judge. If a 2nd season of Firefly kickstarter went up, I would probably be in for an embarrassing sum of money in order to see that exist.
Agreed. Amazing stuff has been made that otherwise wouldn’t. The Fate Core one was the best value I have ever seen in my life. The number of supplements you got in PDFs for a $5 donation was unreal.
I kicked in for Michael Totten’s Cuba adventure through Kickstarter and got to enjoy his dispatches as a result. Couldn’t have been happier with how that worked out.
Kickstarter Genius! Available Now!
The only sad part is, this being Ukranian, I suspect this is all their army has right now.