[backspace]

Never argued that Kickstarter is a bad thing. Like I said originally, it is a very good thing and as you stated, it is great for certain types of projects (too small for VC's, not large enough return, etc.)

VC's have to judge if there's a market and Kickstarter helps with that. But VC's also try to judge whether the founders have the ability to succeed, whether their business plan (costs vs. revenues) are sensible, etc. How does one do that through Kickstarter? I'm sure you'll agree more than 50% of the people who've funded the project on Kickstarter didn't even bother to figure out whether the startup is set up to succeed. (For additional evidence, see "Diaspora")

Btw, when you say Kickstarter campaigns can be 100x smaller, I'm assuming you meant to exclude ones raising upwards of $3.8 million right?

[wpietri]

When I say campaigns can be smaller, I mean that most VCs can't afford to do small deals. Their partners are too expensive. 10k projects are common on Kickstarter, though.

Your 50% number seems meaningless to me. Not everybody has to do the full research. Even with VC investments not everybody does full due diligence; as long as there's a lead investor willing to do the work many are much more casual. The larger a Kickstarter grows, the more likely it is to be scrutinized, both by funders and by outside participants. In this case, there was plenty of info available to evaluate the team.

Also, pointing out one failure like Diaspora is worse than meaningless. For every Kickstarter failure you find, I'm sure we can come up with 20 VC ones. Failure isn't the problem; failure is the point. Reward requires risk. Risk means some failures. As long as they continue to be, like Diaspora, interesting failures, then we're doing fine.