USA TODAY International Edition
Crowdfunding takes a hit
Facebook’s Oculus deal leaves some investors bitter
Facebook’s acquisition of virtual reality headset maker Oculus VR has had a chilling effect on some of its crowdfunding supporters.
Oculus is the first case of a product going from a Kickstarter campaign to billion- dollar status. The Oculus Rift project, which made more than $ 2.4 million in its Kickstarter campaign in September 2012, grew into the company acquired by Facebook for $ 2 billion on Tuesday.
Facebook stock plunged nearly 7% Wednesday to $ 60.38 after its second big acquisition in as many months. Last month the social network paid $ 19 billion for messaging start- up WhatsApp.
Oculus may be the biggest Kickstarter success story, but it’s not the only one. Others include Logitech’s acquisition last year of Chicago- based TT Design Labs, a two- person start- up that launched the TidyTilt iPhone case in 2011. Best Buy also acquired the 2011 crowdfunded PadPivot product to sell under its Rocketfish brand in its stores.
Facebook’s blockbuster buy of Oculus has many of the project’s original crowdfunding backers and others, most notably Minecraft designer Markus Persson, decrying the development. “We were in talks about maybe bringing a version of Minecraft to Oculus. I just canceled that deal,” Persson posted on Twitter. “Facebook creeps me out.”
Dozens of comments channel- ing similar sentiments surfaced on the dormant Oculus Kickstarter. com comments page, too.
“I would have NEVER given a single cent of my money to Oculus if I had known you were going to sell out to Facebook. You sold all of us out,” wrote a Kickstarter backer named John Wolf.
Veteran video game designer and studio head Brian Fargo, who has funded two games, Wasteland 2 and Torment: Tides of Numenera, on Kickstarter, said that he understood both points of view. “What makes Kickstarter nice is that ... if there is a windfall, the principals get the money for once, instead of some VC firm,” he said. “The backers are upset because ... their dream has been gutted. They don’t know what it means. Nobody knows what it means.”
Still, supporters got their money’s worth, says Mike Vorhaus of consulting firm Frank Magid Associates and president of Magid Advisors. “I think everybody knows that they don’t get a piece of the company. Oculus can say, ‘ You got exactly what we promised you. Thank you for helping Oculus and be happy for our continued success. Buy Facebook stock, if you want to.’ ”