I wonder if this will make angels worry, the same way that angels made VCs worry. And if so, I wonder if we'll be seeing better terms for future founders from the old system investors.
Yes because Kickstarter has a high profile now, and there is rather significant amounts of money flowing through it. Angels and VCs sometimes only put in a few k or a few mil. for a company, and now it seems as though you can just go to kickstarter for that amount.
No because kickstarter isn't for everything. The closer your project is to the ideal of a semi-artistic one-off project with a timeline of months that produces a tangible product that the backers can receive the more likely it is to be approved and funded. But not all businesses fit in that model. More so, that model of venture isn't necessarily the sort of thing that is most attractive to an investor. Kickstarter projects are the sort that scale up slowly and carefully. But a lot of the most desirable investment targets are software companies which provide a service who can scale up by a factor of thousands or millions in a matter of months.
Now, there is still a sizable niche that straddles both worlds (such as game development) and you can expect a lot of interesting things to happen in that space in the near future.
It might but there's a couple of reasons that Angels/VCs need not lose too much sleep. Kickstarter only accepts "projects" that have an end point. To be fair, they're perhaps loose in their application of this, but generally speaking, the project needs a finish point. For example, Pebble will ship the core product, a completed watch.
When it comes to software/web apps, there's a less definitive end point. Games seem to get through ok, because they reach a pretty clear release point. "Projects" like Instagram would likely not have made it through as a Kickstarter project, because they're designed to be iterated on. Getting to the "first release" is not generally what Kickstarter accepts... unless you're Diaspora... or anything open source.
I think they probably should be. Kickstarter may not fund all types of projects but Kickstarter is only the beginning. The world works on trends right? Put all these things together and look forward 2-3 years:
AngelList
Kickstarter
JOBS Act
Software boom
Open hardware innovations (Arduino, Raspberry Pi, Open 3rd printers, etc.)
I'm not really certain that things at the VC level would be a whole lot different but I would sure be worried if I was an angel or earlier. Pretty soon, we'll be far less dependent on them than they are used to. If you ask me seed stage may have so many options that they'll have to reverse-pitch ;)
Yes because Kickstarter has a high profile now, and there is rather significant amounts of money flowing through it. Angels and VCs sometimes only put in a few k or a few mil. for a company, and now it seems as though you can just go to kickstarter for that amount.
No because kickstarter isn't for everything. The closer your project is to the ideal of a semi-artistic one-off project with a timeline of months that produces a tangible product that the backers can receive the more likely it is to be approved and funded. But not all businesses fit in that model. More so, that model of venture isn't necessarily the sort of thing that is most attractive to an investor. Kickstarter projects are the sort that scale up slowly and carefully. But a lot of the most desirable investment targets are software companies which provide a service who can scale up by a factor of thousands or millions in a matter of months.
Now, there is still a sizable niche that straddles both worlds (such as game development) and you can expect a lot of interesting things to happen in that space in the near future.