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ShmoozBiz (shmooz-biz) n. 1. the business network for crowdfunding, startups, investors, and service providers focused on building relationships that take your business to the next level.

Oculus VR from Kickstarter to Facebook, A Real CrowdFunding Success Story

You have by now heard about the acquisition of Oculus VR by Facebook, who hasn’t? And you are reading dozens of stories in the press and blogs about how upset Kickstarter contributors to the campaign feel. They are talking about how Kickstarter contributors “helped make Oculus a success story and all I got was a lousy T-Shirt”. There are also stories discussing how Kickstarter will benefit from more individuals looking to crowd fund going forward.

It is however very simple. The acuisition of Oculus VR by Facebook provides us insight into the “proof of concept” not of Oculus as a company or product, but that CROWDFUNDING DOES WORK!

There have been numerous success stories of individuals and companies using Rewards based Crowdfunding to launch a new product into the market. We all heard of the millions of dollars raised for the “Pebble Watch” and the “Veronica Mars Movie” campaigns which were plastered all over the news as major crowd funding success stories. By far, the greatest crowdfunding success story of all to date is the Oculus VR, which is likely to be the greatest crowdfunding success story of all time.

The current process that has lead to successful funding has been to develop a product, place it on a rewards crowd funding platform and market it to the public, which leads to customer discovery and proof of concept. If your crowd funding campaign is successful you are likely to have Angel Investors and Venture Capital beat a path to your door. This particular method will give you the opportunity to get better terms for your financing rounds. You can now grow your business to profitability.

You are now also likely to see more Angels and the VC community trolling for campaigns on Kickstarter, Indiegogo and other rewards based crowd-funding platforms. It will provide them a way to find better projects and startups in order to improve their deal flow.

One of the more unique changes in CrowdFunding, which may be embraced by Equity platforms, is a shift to a more hybrid model of Rewards and Equity within a single campaign. Some individuals that had contributed to the Oculus Kickstarter campaign have already stated they would have pledged for a reward and also invested in the company if equity was offered. This would only work for accredited investors on a national scale or through Intrastate CrowdFunding for unaccredited investors. A great example of two Intrastate hybrid models would be SparkMarket and SterlingFunder in Georgia.

The successful acquisition of Oculus for $2 Billion also shows us there is both a need and desire for unaccredited investors to participate in Equity based crowd funding. The concept of crowd funding works and has lead to many new ventures, which had started, from an idea to a funded and successful multimillion-dollar business.

Now all we need is for the SEC to adapt simple rules to give investors an alternative to the status quot.
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