I'm of the opposite opinion. Companies that already have financial backing, have already put significant time and effort into a project, and already have experience running their business are much more likely to follow through on their campaign than some kid who build a new chair in his bedroom and thinks he can deliver it a month after his $100k campaign is finished.
Sure, Adapteva has raised ~$1.5mm in VC and another ~$850k in debt. Now they are raising $750k on Kickstarter, the "funding platform for creative projects." There's a big disconnect there. If well-funded companies like Adapteva are successful raising on Kickstarter, why wouldn't even bigger companies milk the Kickstarter sheep for R&D funds too? While it wouldn't violate the letter of Kickstarter rules for Intel to run a campaign like this, certainly it's not in the spirit.
And yes I get that it's open source blah blah blah, but this project is certainly part of the plan for an institutionally-funded business to make money. Adapteva is a .com, not a .org.
Separately: if Adapteva is only 8 months from delivering completed product to users, shouldn't they be able to raise more funds through traditional channels? They clearly have/had VC buy-in and can raise through institutional channels. If they are just finishing the final debugging/SDKs/etc. at this point, it's not a good sign that they can't raise another $750k from their existing backers to cover final launch costs.
I don't have a horse in this race, but it doesn't feel quite right to me.
Let's correct some of your assertions:
1.) Adapteva raised $1.5M from a small board business (not a VC) because it couldn't get a VC investor.
2.) A "well funded" semiconductor is one that takes in $100M like Calxeda. Adapteva has done "more with less" than any chip company in history.
3.) Adapteva is a chip company. The Parallella project is not an "R&D effort" it's about bringing the cost down for an open board product that the developers clearly want and that the industry needs.
4.) Adapteva has talked to >50 large institutional investors. Mostly they are either afraid of going up against Intel, Nvidia or they flat out don't invest in chips.
5.) Kickstarter is not just for non-profits.
First, I didn't mean to sound quite so negative on your project. I actually hope you succeed. If this is something the industry needs, I have no doubt you'll be a wild success.
I just take issue with raising money from unsophisticated unaccredited investors without even providing complete disclosure or binding contracts in return. I know a lot of companies do it, and I dislike it in those cases too. I also know I'm in the minority here and that it's only a matter of time before companies with huge VC backing & public companies are using Kickstarter to raise money. I think that's a bad thing, but others disagree.
Also, quickly:
- I'm not against for-profits using Kickstarter; most of the efforts there are for-profits. But companies that have raised millions of dollars probably should disclose that fact prominently in their campaigns.
- Similarly, the fact that you've been denied investment by >50 institutional investors is relevant in asking for money. It might be positive for some, negative for some. But it's likely not going to be a no-op for most.
- My figures come straight from Crunchbase, I'm not more connected than that.
I don't think a $2.35M round is really that much for a chip startup. The fact that they even think that they can plausibly launch a chip and some level of supporting documentation, software, etc for ~$3M total, that is a remarkably efficient use of funds. By the way, Kickstarter funds are "cheap" (no dilution & no debt) so anyone who can actually raise money on Kickstarter should do so.
I'm not qualified to evaluate how much money a modern chip startup needs to launch a product. But it's worth noting that the Kickstarter pitch doesn't mention the millions the company has raised so far (apologies if I missed that part).
>> Kickstarter funds are "cheap" (no dilution & no debt)
Of course they are, and that's kind of my point. Raising money from unsophisticated unaccredited investors without providing full disclosure or even a contract in exchange is obviously a great source of capital. However, I'm not convinced pitches like this would withstand scrutiny by the relevant regulators if they were not asleep at the switch.
I didn't mean to be overly critical of the project. I wish them all due success. That doesn't mean I can't dislike the Kickstarter campaign. (I would similarly dislike AMD raising funds on Kickstarter, even if I liked the project.)
Just like some startups raise VC for "validation" instead of money, companies are now using Kickstarter for PR. And if it's successful, people will pay you for your PR campaign.
