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Kickstarter backers of Oculus Rift angrily reject Facebook takeover

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The Globe and Mail | NICOLE PERLROTH | March 27, 2014

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For many of Oculus VR’s early backers, news that the virtual-reality startup was selling to Facebook for $2-billion was a little like watching Bob Dylan appear in a Super Bowl Chrysler commercial.

The Southern California company got its start on Kickstarter, the crowdfunding site where enthusiastic virtual gamers helped it raise $2.4-million in exchange for a free developer’s kit or a T-shirt.

Now some of those donors are crying “sellout.” They want their money back – and are happy to return the T-shirts.

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“I supported this because it’s something that I’ve wanted to see become a reality since I read my first William Gibson novel,” one Oculus donor wrote on Kickstarter. “Now I find out that I might as well have handed my money right to Facebook and I feel a little sick.”

The extraordinary reaction of early Oculus VR backers and fans to news of the Facebook deal illustrates the tricky relationship between companies raising money on Kickstarter and the people who donate to them.

The hope, among donors, is that they can help the interesting ideas of these companies get off the ground. Their donations amount to seed funding – enough money to build a prototype, perhaps. And assuming they understand what they’re doing, the donors have no expectations of gaining equity in the young company.

With that largess comes a sense of community and expectations that it will deliver – or at least try really hard – on what it has promised. But when the little company hits a big payday, as Oculus VR announced Tuesday, it is strikingly clear that community has very little say in its decision-making.

With $2.4-million raised, Oculus VR was among the 20 most-funded projects on Kickstarter. And for many who pledged $300 – enough to earn a developer’s kit – it offered hope that virtual reality, a longtime goal of the gaming industry, could finally become viable.

Oculus is only one of many independent Kickstarter projects, which can range from companies to books to a movie, to get picked up by a mainstream organization.

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“The gaming developer community is very independently spirited,” said Tripp Jones, a partner at the venture capital firm August Capital.

“Oculus was their white knight, and the developer community completely bought into the company’s vision because they believed Oculus was their best hope for a new independent platform.”

He added, “Now that platform is Facebook’s platform.

Adding to the unhappiness of donors, Palmer Luckey, the company’s co-founder, as recently as last month said he had no intention of selling the company.

“I don’t think there’s a reasonable number that would make me say, ‘You know I was going to change the world with VR and try to change humanity forever but here’s a number,’ ” Luckey told GamesIndustry International, a gaming industry website, last month.

Some game developers hoped Oculus VR could help build a new gaming platform, a small-company alternative to an industry dominated by giants like Sony and Microsoft. With developer kits in hand, they were figuring out if Oculus VR and its odd-looking visor were a part of their futures.

Few thought that meant a future that also included Facebook.

Markus Persson, the maker of the popular game “Minecraft,” criticized Facebook on his personal blog and on Twitter. Persson said he had been in talks about bringing a version of “Minecraft” to Oculus.

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