"Kickstarter lets public fund ideas" April 30, 2012|By Jenna Wortham
NEW
YORK - When Eric Migicovsky wanted to develop wristwatches that could
communicate with the iPhone, he went the traditional route of asking
venture capitalists to finance his company.
But he couldn’t get a foot in the door, let alone secure any money for the Pebble watch.
So
he turned to Kickstarter, a site where ordinary people back creative
projects. Backers could pledge $99 and were promised a watch in return.
Less than two hours after the project went on the site, Migicovsky and his partners hit their goal of $100,000.
“By
that night, we were at $600,000,’’ said Migicovsky, 25, a recent
engineering graduate of the University of Waterloo. As of Sunday
afternoon, the total had passed $7 million.
Pebble is the latest -
and by far the largest - example of how Kickstarter, sprouted in the
New York living room of its founders three years ago, is transforming
the way people build businesses.
Although the site began as a way
to raise money for quirky projects like around-the-world boating trips,
it quickly expanded to include video game production, feature films, and
innovative new gadgets, like the Elevation dock, a sleek stand for the
iPhone, or Brydge, which turns an iPad into laptop resembling the Mac
Air.
“This year marks the year that we’ve seen Kickstarter enter
the real world in a number of ways,’’ said Perry Chen, one of its
founders. “At Tribeca Film Fest, there are a dozen different
Kickstarter-backed films . . . and we just had our birthday party at a
Kickstarter-funded restaurant.’’
Kickstarter offers entrepreneurs a
way to float ideas and see if there’s a market for them before they
trade ownership of their company for money from venture capitalists.
Other
sites for financing through a crowd have appeared. Crowdtilt lets
friends contribute money for outings, Zokos is for guests to pitch in
for a dinner party, and Gambitious is devoted to indie game developers,
to name a few.
Kickstarter, the biggest, has raised more than $200 million for 20,000 projects.
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