Comment Re:Kickstarter is not an investment (Score 1) 535
Couldn't Kickstarter just act as the majority investor and vote based on a poll of people who contributed?
So Kickstarter becomes the sole investor, with a 51% share or whatever of voting power, they put up a poll to all who contributed saying "Should we allow the Facebook acquisition?" and if 70% of contributors say no, Kickstarter blocks it?
Yes kickstarter could change their charter to do this, but I'm guessing they don't want to because under most state laws, being a mutually-owned company, they would be on the hook to seek/verify *accurate* information about the companies that they invest in and potentially provide some of that information to the (non-accredited) investors. Instead Kickstarter does not seek and does not provide information. Information is provided simply by the project directly to the backers often simply through unverified facebook accounts. Kickstarter is not involved in any way in the information loop and I doubt they want to be so as to encourage a large number of projects and to keep their butts out of the litigation chairs.
GSV is an example of a closed-end mutual fund company that did something like this. The problem as I mentioned is that the investors are not investing in the companies like Facebook, but in GSV. It would be like investing in Kickstarter, not Oculus. For ever Oculus, there are inevitably duds, and this is why closed-end mutual fund companies like have a pretty poor performance record.
New regulations are being drafted that might change the landscape of crowdfunding over the next few years, but reducing reporting requirements for investments under the $500 level and allowing for more solicitation/advertising. Who knows, maybe if the regulations are liberal enough some organization like kickstarter might take that plunge (but I doubt it). Remember, with this route, you don't get rewards, you get equity and with startup ventures, often equity is less valuable than toilet paper. For example, the "c-level" staff of a startup venture for instance could take a business trip to Hawaii with your funds as a team building exercise and it's likely you wouldn't be the wiser... There's a reason that they restrict this stuff to sophisticated investors that have staff to audit finances and select key management staff and board members.