Newsbrief: In the wake of Double Fine's astonishingly successful Kickstarter campaign, industry trade body UKIE called for legislation changes that would allow UK video game companies to use crowd funding to finance their projects.
UKIE explained that the UK's current legal and regulatory framework puts too many restrictions on crowd funding, and the group promised to release a report that outlines the ways in which the laws should change to better suit game developers and the entertainment industry at large.
"Double Fine's Kickstarter project has today shown the huge potential of crowd funding to benefit games and interactive entertainment businesses," said UKIE chief executive Jo Twist.
"We need the UK to be able to take full advantage of crowd funding and UKIE's Crowd Funding Report, due next week, will outline exactly what needs to be done for this to be possible."
There is nothing stopping Kickstarter from being in the UK as-is. But this is attempting to effect serious change in the way securities are dealt by permitting crowd funding from "small holders" to purchase securities in bulk and I'm extremely wary of it for two reasons:
1) they're using Kickstarter as an example. This is disingenuous in my opinion as its saying "look what donations/pre-ordering can accomplish, now let us sell shares this way" and nearly every discussion seems to revolve around selling investments. Kickstarter proves this isn't required.
2) in my own investment dealings, I've had to deal with venture capitalists who have been nothing short of shysters. Term sheets which could drive their own truck through them, legals which are not only different to the terms laid out in the term sheet but actual opposites which, when discovered are resulting to more more than an apology.
So, the mother of all unintended consequences would be to permit this and allow investment managers to punt junk companies on the Internet for pennies. In effect, doing a pre-IPO IPO. With the number of companies out there and the number of potential investors, this becomes an administrative nightmare. While the fund managers laugh all the way to the bank, you have thousands of shareholders wondering why they bothered considering the bulk of the money goes on fees and you've got such a micro-percentage of the company that you can't control anything anyway.
In my opinion, these people are not to be trusted.
Step 2: ???
Step 3: Make your game!
There is nothing stopping Kickstarter from being in the UK as-is. But this is attempting to effect serious change in the way securities are dealt by permitting crowd funding from "small holders" to purchase securities in bulk and I'm extremely wary of it for two reasons:
1) they're using Kickstarter as an example. This is disingenuous in my opinion as its saying "look what donations/pre-ordering can accomplish, now let us sell shares this way" and nearly every discussion seems to revolve around selling investments. Kickstarter proves this isn't required.
2) in my own investment dealings, I've had to deal with venture capitalists who have been nothing short of shysters. Term sheets which could drive their own truck through them, legals which are not only different to the terms laid out in the term sheet but actual opposites which, when discovered are resulting to more more than an apology.
So, the mother of all unintended consequences would be to permit this and allow investment managers to punt junk companies on the Internet for pennies. In effect, doing a pre-IPO IPO. With the number of companies out there and the number of potential investors, this becomes an administrative nightmare. While the fund managers laugh all the way to the bank, you have thousands of shareholders wondering why they bothered considering the bulk of the money goes on fees and you've got such a micro-percentage of the company that you can't control anything anyway.
In my opinion, these people are not to be trusted.