Why'd you choose to raise money via Kickstarter instead of going the traditional funding route? I have my theories, but I'd love to hear what specific benefits you have using this model.
(I am not an expert, this is just what I think) The problem is: you need tens of thousands of dollars for a single manufacturing run. You can either raise capital by selling equity (traditional investment), or raise capital by preselling your device using Kickstarter. (Obviously there are more options).
This is basically the best of both worlds approach. The getting your cake and get to eat it too: you get the capital AND keep all of your equity, with a healthy dose of knowing the demand of your product before beginning your first run.
This is a pretty important observation. In one sense, it's no surprise that YC backed companies are at the front of the wave experimenting here - I suspect the smart VC people are fully aware of the paradigm shift that Kickstarter is making possible. I'd be astounded if pg doesn't already have strong ideas about how he and YC can bring value (and hence earn a cut of the profits) to smart startups who've got a non traditional-equity-sharing option to raise funds.
There are clearly some people attracting angel or a-round sized capital via Kickstarter without giving up _any_ equity or control. This, the ZPM espresso machine guys, Wasteland2 - surely at least some VCs and angels are viewing those as "lost opportunities"?
I wonder if we'll start seeing "zero cash, very small equity" deals from firms like YC, for people using _other_ means of fund raising?
Seems to me that the Kickstarter use case here has less to do with funding than gathering serious commitments to buy so that there's not a warehouse full of unsold inventory.
I wonder how PayPal allows preselling for this but if you or I were to try the same thing PayPal would put a 6 month freeze on the funds once they figured out that orders aren't immediately shipped.
