

Crowd funding acceptable for startup? - TMK
http://aleprok.eu/2011/10/18/crowd-funding-acceptable-for-startup/

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jmathai
I launched OpenPhoto on Kickstarter as a project with full intentions on
building a company around it (I left my job to pursue it).

It's an open source project so that helps in terms of getting accepted into
Kickstarter. Their terms state that projects are basically fixed in term and
scope.

What I promised on Kickstarter was a photo management/sharing platform that
allows you to use your Dropbox or S3 accounts for storage. I'm nearly finished
with that.

The next phase is to offer a hosted version of the software (a la Wordpress)
via a for profit company. The source is and will always remain open.

<http://theopenphotoproject.org>

<https://github.com/openphoto/frontend>

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TMK
Thank you for letting me know of your success with Kickstarter. Good luck with
OpenPhoto.

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nostromo
When we were raising our angel round we asked our lawyers about this.

In the US, the general legal advice is that unless it's friends and family, it
is not a good idea to raise money for equity from people who are not
Accredited Investors. (<http://en.wikipedia.org/wiki/Accredited_investor> \--
in short, millionaires).

IANAL, but the reason they gave is that non-Accredited Investors have more
protections from the SEC and they can sue you if they decide that you didn't
spend their money wisely.

There are also some complications that arise when you have too many investors
on your cap table. I've heard of people getting around this by creating an LLP
that invests in your company with set terms, rather than directly investing in
your company. But I can't say for sure if this is good advice.

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jamieb
You could sell Obama O's and Cap'n McCain's...

<http://www.airbnb.com/obamaos>

If they don't invest, they don't have to be accredited.

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toast76
I know this wasn't the question, but why do you need money?

You have "some ideas" for "some simple game projects"? That doesn't sound like
a startup...that doesn't even sound like a project. Unless you have a very
clear vision of exactly what it is you're wanting to do, you're going to have
a hard time getting anyone to part with their money. If Tim Schafer has "some
ideas", I'd give him money for sure....but unless you're proven, your ideas
count for zip. It's the execution that counts.

A startup is a business searching for a business model that scales. A startup
isn't a couple of guys with a few ideas that may or may not work.

If you have some awesome ideas, the best way to get money is to work on your
idea until it is at a point where someone can see potential in it. It costs
literally nothing to start working (providing you have the tools, which I'll
assume you do). But it sounds like you're asking for people to put money in
to...well...nothing.

Finally, if your idea of a project you and a few guys can work on, I'd suggest
something a little less epic than "3D Sandbox mmorpg with really huge world
designed and lot of monsters, characters and even own language for in game
characters."

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TMK
Thanks. This is what I waited for, the rant. You even read my next blog post.

One down. You should not be asking the question, "Why do we need the money?" I
answered the question in the original blog post. For skills we lack and don't
have 10 years to work on.

Two down. Why would I at this point start telling about my or his possibly
epicly stupid ideas. Of course in the case if we actually do fund our first
commercial project with crowd funding we will have to tell about the project
and why the people should donate to us or invest in us.

I agree that ideas do not count for zip if the execution fails. Startup is a
fresh business in phase of development and research for markets. Yes finding
scaling business model is nice, but still the product is part of the startup
too or you do not have anything to sell.

I know we could go the way of hacking code all night and day until we have
something to show. Maybe uglier blocks than Minecraft has with barely no
textures.

I was not asking you to give me money now. I was asking if we should go the
way of crowd funding or find other ways to generate that cash by part-time
working, etc.

You kinda missed the point of the blog post where I mentioned about the 3D
sandbox project. Over Design, being over my head, etc.. It's experience which
I won't fall into that easily again.

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nhangen
This is exactly why we launched IgnitionDeck. We were thinking of raising
money via traditional methods, but crowd funding, when it works, is so much
more appealing. Of course, it's not as easy as it sounds, as consumers are
just as picky, if not more so, than investors.

~~~
TMK
Yeah. I'm kinda afraid of the picky people myself. Kinda even threw a joke
suggestion to sparky that I'll whip up some malicious code and sell it in the
black market to do the funding.

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bengl3rt
I would really like to know the answer to this as well. Where's the line
between a "project" and a "startup"?

~~~
tptacek
The most meaningful distinction to make here is that a startup exchanges
equity for investment capital, while a project simply accepts advance payment
for some good or service it intends to produce.

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gojomo
They could still use Kickstarter to help fund one of the startup's projects –
they just can't offer equity in return.

One attempt to find a legal workaround for securities laws which make it hard
to crowdfund startups is ProFounder:

<https://www.profounder.com/>

