CEO and co-founder of the crowdfunding giant Kickstarter Yancey Strickler may have high hopes and big plans for his platform that allows consumers the power to raise funds for projects from art to technology. Unfortunately for some, Mr. Strickler has formally confirmed the platform will not be getting involved with equity crowdfunding. The crowdfunding expert sat down with TechCrunch’s John Biggs at TechCrunch Discrupt New York to discuss the topic.
“We’re planning on sitting that one out. I think that what we really like about Kickstarter is that projects are funded just because people think they’re cool. Because they’re excited about them. Because of what you get all of really weid, crazy things that get funded, and it’s just an incredibly diverse universe of people making things just because they’re excited about them.”
He continued, “That was always a real motivator for us from the very beginning, when we first started working this – for Perry [Chen, co-founder and now chairman] that was 12 years ago. Which is the sort of art and culture that we like are things that we knew are hard to get funded.”
The Securities and Exchange Commission is currently in the midst of developing rules to legalize equity crowdfunding, which would give non accredited investors rights to fund companies in exchange for ownership shares. Although this seems promising to those “regular people,” according to head of research for the National Venture Capital Association John Taylor, some regulatory questions remain, including what voting rights would the new shareholders receive.
Due to Kickstarter’s management already announcing it has no intention of taking it public, or selling the company for that matter, it not too surprising that the crowdfunding giant refuses to allow equity crowdfunding to happen on its site. Mr. Strickler also argues the real focus of his company is really what makes it stand out from the rest.
“If you look at the way the culture industry or investment models work, someone gives you money and hopes that they will make money themselves – and obviously that is the point of investment but I think art works by different rules, creative things work by different rules. If you look at everything through the prism, the concept of what becomes possible become much, much smaller,” Mr. Strickler explained. “So I love the idea of opening up that funnel to things existing just because people want them to – and I think that’s enabled many more things to exist. So for us, we are an extremely mission driven company – and our mission is to help people bring creative products to life. And my hypothesis is that our current model is going to best serve that mission.
“I think there are things that are more important than money. I think the community is something that our hearts instinctively look for, and so for me I think feel a great resolve and a real privilege to be able to devote my life to.”
Currently, Kickstarter allows startups to seek purchase commitments from consumers with the promise of building them a device or sending something other non-monetary reward for their investment. This has helped fund development of the Pebble smartwatch and virtual reality goggles designed by Oculus. The platform also allowed fans of the early 2000s television series “Veronica Mars” to fund a movie version of the show with the original cast. Mr. Strickler noted, “’Veronica Mars’ suggests that even something like Hollywood could work in a very different way that I think might be more healthy for everyone.”
Mr. Strickler went on to describe the crowdfunding industry in general as being bigger than ever and smaller than people think. “The projects that you see on Kickstarter get tons of attention, and Kickstarter itself seems to be like a top 20 brand on the Internet or something, even though traffic wise we’re nowhere near that. But these things have resonated in a big way.”
“About six million people have backed a Kickstarter project, which is a lot, but still, thinking in Facebook terms, that’s nothing,” he added.
The interview in its entirety is below.