Kickstarter reincorporates for the public benefit
They could be chasing the high profits that their highly popular site offers, and gone the way of YouTube and Facebook. But instead, they announced on Sunday 20th September that they have reincorporated the company as a “public benefit corporation”.
Public benefit corporations are a relatively new invention in the USA, where Kickstarter was born. The law requires this type of corporation to do something to benefit the public.
In this way, no matter what else happens to the company, Kickstarter will remain free to pursue its mission to benefit the public: to “help bring creative projects to life”.
Mr Chen and Mr Strickler said their ultimate hope was to set an example for the next generation of entrepreneurs by aiming to benefit the public rather than line their own pockets.
“As younger companies come up and think about how they operate and how they want to be structured, maybe they won?t be so easily swept up by all the usual choices,” said Mr Chen, the company?s Chairman and resident artist. “There?s a huge difference between a values document and the legal foundation of your company.”
Mr Strickler, Kickstarter?s CEO, said, “We don?t ever want to sell or go public. That would push the company to make choices that we don?t think are in the best interest of the company.”
Founded in 2009 and famous for crowd-funding everything from eskies to books, children?s TV shows, and video games, Kickstarter chose to become certified as a B Corporation in 2014. B Corporations must satisfy strict environmental sustainability and social responsibility standards and report on this annually to their shareholders. Other B Corps include e-commerce site Etsy, and glasses retailer Warby Parker.
All of this is a far cry from the profit-seeking behaviour of recent tech start-ups such as Uber, Airbnb, and Dropbox. These companies have all raised billions of dollars from venture capitalists with the aim of returning large profits.
Kickstarter has raised $15 million to date and has been previously backed by well-known tech investors such as Chris Sacca (the former Google executive who invested to make Twitter happen), Union Square Ventures, and Jack Dorsey (co-founder of Twitter and Square). However, Mr Chen and Mr Strickler have been clear with investors from the start that they were not planning to make big profits from Kickstarter.
The co-founders plan to begin paying dividends to shareholders and their staff members over the next few years. Mr Chen warned, “It?s not going to be a huge lottery ticket. We?ll all benefit from what?s created.”
How Kickstarter Australia works
Discover projects on Kickstarter Australia or start your own project. Kickstarter Australia runs itself by charging small fees – if your project is successfully crowd-funded, you pay Kickstarter 5% of the total funds raise and a 3-5% payment processing fee.
If your project doesn?t make it off the ground with enough crowd-funding in the specified project timeframe, you don?t pay any fees.
Successful Kickstarter projects in Australia
Some of the most successful Kickstarter projects in Australia in 2014-2015 include:
- Satellite Reign video game – raised over $1 million.
- Ninja Sphere universal remote for the home – raised $702,937.
- LazerBlade affordable laser cutting tools – raised $569,397.
- The Stupendous Splendiferous ButterUp knife that softens butter as it slices – raised $360,286.
- N2 digital pen to work on smart devices by writing on paper – raised $359,112.
The latest projects we?ve seen of note include a jewellery brand started by 13-year-old identical twins Summer and Piper Workman.