Kickstarter CEO: No IPO for Us, and No Equity Crowdfunding Either
The tech industry may be fascinated by Kickstarter, but Kickstarter is no normal tech company, said CEO Perry Chen today.
The crowdfunding platform has pushed nearly $350 million into 76,000 projects since April 2009, with 44 percent of them reaching their goals and thus the cash. But Chen said Kickstarter itself, which is backed by Union Square Ventures, Betaworks and lots of angel investors, has no intention of cashing out.
And further, Kickstarter has no plans to get into equity crowdfunding — where small backers would get a piece of the companies they fund — despite legislative efforts like the JOBS Act to make such investments more accessible and legal.
“We think the most disruptive aspect [of Kickstarter] is the removal of the investment component,” Chen said. “People are supporting projects because they want to see them happen. It’s so different than giving money because you want to make a profit.”
Chen said he’s not looking to upend traditional industries, but rather fill in the gaps that they leave. For instance, the entertainment industry is built around its established stars and a few up-and-comers. Kickstarter wants to serve everyone else.
And most ideas in the world aren’t necessarily going to make lots of money, but that doesn’t mean they shouldn’t exist.
The Internet helps make creativity easier than ever, Chen said. It’s easier to learn, it’s easier to share and collaborate, and with Kickstarter, it’s easier to find supporters. And on the flip side, the beauty is that people develop loyalty and relationships directly with creators instead of brands.
What Kickstarter needs to do is make itself more accessible and understandable, Chen said. Twitter has its 140 characters — everybody gets that. Kickstarter is working to find that kind of template. “We’re on a journey to where people fundamentally understand how Kickstarter works,” Chen said.
The company has had to make efforts to clarify what it is not. After lots of attention for Kickstarter hardware projects — and also the ongoing delays that many of them are experiencing — a blog post authored by Chen and his co-founders last month proclaimed “Kickstarter Is Not a Store.”
“It’s not Best Buy,” Chen said today. “You’re supporting somebody at a decently early stage, and you should understand that’s what you’re getting involved in. Delays are not infrequent. It’s really about the creator setting the expectations for backers, and then if they have trouble, being very transparent.”