Kickstarter CEO on Equity Crowdsourcing: “We’re Not Interested in that Model”
When the JOBS Act was passed into law last month, I immediately wondered about the effect it would have on the crowdfunding of independent feature films. Many independent films are successfully raising into the six figures by banking on the generosity of their supporters and giving them only creative, non-monetary rewards. But the JOBS Act, as detailed by Matthew Savare and Richard Jaycobs at Filmmaker, allows filmmakers to seek actual equity investors via crowdfunding platforms. These platforms, like Kickstarter, will have to register with the SEC and provide investors with various disclosures.
Some filmmakers are excited by these new regulations, believing that equity investment will attract more coin for their films. Others worry that this new equity option will bias contributors towards more commercial projects. (And still others, like me, wonder how producers will send out hundreds of annual K1s for each film.)
Kickstarter co-founder and CEO Perry Chen is definitely in the latter camp, as evidenced by an interview with Om Malik published today at GigaOm. It’s a long interview covering many different topics, and worth reading in full. But here’s the part where Chen makes it sound like Kickstarter won’t be doing that pesky SEC registration.
Om: With the JOBS Act, there is a lot of talk about Kickstarter being used for crowd funding of startups, etc. What do you make of all that talk?
Perry: Some people have made assumptions about what we would do. We’re not interested in that model.
We’re going to keep funding creative projects in the way we currently do it. We’re not gearing up for the equity wave if it comes. The real disruption is doing it without equity. The real disruption is when you break down the funding of a project into all these little bits.
When people are giving $5, $20, $50 — people don’t need to receive a return on their investment. People are giving relatively affordable amounts of money and they decide how much they give.
So many ideas, in general, in the world are not about and are not going to make money. Those things need a model. That’s the world we come from. That’s what we wanted to support.