Nathan McGinness

Where’s my equity?

When I see a very talented (and professionally proven) designer, writer or engineer asking for charity on Kickstarter I can’t help but feel that something is a bit whack – on two counts.

1. The creative (or arguably the entrepreneur in this case) is selling themselves short. We often see Kickstarters justifying the amount they are asking for by playing down any idea they will be paid and noting that the money will go towards bills, materials, etc. Why shouldn’t a talented creative, working on a project that people want be paid well!?

2. Where’s my equity? We are seeing start-up costs be funded without any exchange in return. What if Openphoto grows to the size of Flickr? The earliest of angels receive nothing for their investment (in some Kickstarter projects in the many thousands of dollars), or even a promise of being paid back.

I doubt this is the first software project on Kickstarter but it’s come right out of Sunnyvale, and an ex Yahoo/Flickr employee. There’s angel capital flying around The Bay Area at the moment – I can’t imagine being in a better place to access investors (big or small).

Somewhere there’s probably a line between personal creative projects, and professional or commercial endeavors. I’d suggest it’s somewhere between:

I need more wool so I can knit my grandchildren beautiful sweaters; and; I need $25,000 to bootstrap my new start-up for free.

That being said, I’m not against charitable behavior in creative projects, I understand there’s many without access to capital, and it seems that people want to give, so best of luck to all involved. I’m just confused about who is actually benefitting here.

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