Ask HN: Kickstarter for Startups? | Hacker News Reader

Ask HN: Kickstarter for Startups?

5 pointsparkern5 comments

What would you think if a site existed that was basicaly a kickstarter but for startups/for-profit businesses.

So a startup or concept would come on and post their idea and the community would then buy shares/equity into the company?

I was thinking that because actual profit can be skewed so much, in exchange for buying equity/shares, the startup would payout a percent of revenue back to the investors. That way it couldn't be up for debate what that number is. Thoughts?

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Here are the kickstarter guidelines:

http://www.kickstarter.com/help/guidelines

I don't think those read as though they rule out startups/for profit businesses, but they do rule out some of the destinations of the money (payroll, business expenses), so I'm guess you'd be limited to spending the money on the creative part.

In the case of diaspora for instance, they claim the money should go towards their 'living expenses while they work on the project', but that's pretty broad.

I'm curious what their motivation is to limit what the money can be spent on, after all that's hardly relevant as long as the project succeeds.

I believe it's to encourage the projects Kickstarter funds to have a specific focus, and to decrease the likelihood of fraud. If the money just goes into a slush fund, it's easy to lose track of it.

For instance, the Syzygryd Kickstarter is to fund our flame effects. Our money is earmarked for prototyping and fabricating our flame effects, and any money left over goes to buying more propane for more flamey goodness.

This is actually tricky from a legal perspective because startups are illiquid investments, and the SEC has rules that prevent you from selling shares in a non-public company to so-called non-qualified investors.

I have worked with these guys before. Its a tough spot to be in. I think they are doing good overall.

http://www.profounder.com/

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