Kickstarter Success Catapulted to the Big Time with VC Support
Oculus Rift is one of those Kickstarter campaigns that people cite when discussing the power of crowd funding to create something risky but entirely resonant with the zeitgeist. After raking in nearly $2.5 million backer dollars (and successfully delivering on their campaign promises), Oculus, the company behind the Rift virtual reality headset, garnered an additional $16 million in round one venture capital earlier this year to continue development towards a commercial product. This week, TechCrunch reported that Oculus just got an additional $75 MILLION in second round funding, to bring the Rift headset to market.
Oculus is not the only vc-backed company with its roots on Kickstarter. Both the Ouya game console and the Pebble e-paper watch got infusions of vc money after running highly successful campaigns (both raised on the order of $15 million in venture capital), but Oculus remains the only incipient technology company to get second round funding after backing it’s prototype on Kickstarter. That’s pretty cool, and a serious vote of confidence for the device.
So what’s the big deal about second round funding? Well, obviously if investors are willing to risk big money, they must see the Rift as an investment that will pay off. More to the point, second round funding is the next step to gearing up for a major commercial release. That means, barring catastrophe, you’ll soon be able to enjoy a finished, fully commercialized Oculus Rift in your home (or office, or surgical theater, or anywhere else 3D virtuality might be a boon).
The big question that these developments beg of us all is ‘how do you feel about Kickstarter becoming a place for new product companies to get seed funding?’ For my part, I think it is incredibly democratizing to take the seed funding/conceptual validation stage out of the hands of the venture capital/Shark Tank crowd and put it into the hands of the target audience. That isn’t to say that Kickstarter is necessarily preferable to traditional modes of raising venture capital, but one more avenue to help creators realize their good ideas is… well, a good idea.
I, for one, am looking forward to a Rift of my very own, and that dream just got a whole lot closer.