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The Ancient Gaming Noob Discusses Kickstarter

I am a huge fan and regular reader of the blog "The Ancient Gaming Noob". I've been a gamer since I could use a keyboard, alternating between the qBasic games on my Xerox laptop with double 5 1/2 floppies  (remember Gorillas? I rewrote the script and made the Gorillas different colors!) to the Apple II's at school (Oregon Trail and Prince of Persia ftw!)
Different Colors

Recently, The Ancient Gaming Noob has been discussing Richard Garriot's Kickstarter campaign. The discussion is really getting interesting. You have Garriot, a man who lives in a castle and has been to outer space, using a fund raising tool ostensibly designed for those that, well, need money. Garriot's campaign, which as of this writing has nearly completed his goal of raising US$1 million to help fund a new game, may be more of a self-financing marketing tactic than anything. This begs a few questions - does this sort of tactic devalue Kickstarter? What is the ultimate use of Kickstarter?

If we consider that traditional fund raising methods are completely off limits to the average  entrepreneur, and fail to establish a clear line of communication and accountability between the average (i.e. non-institutional) investor and entrepreneurs with access to existing fundraising, it becomes clear that there is a huge need and desire for alternative investment clearing houses. Kickstarter is not quite what is desired if this is the case - primarily because current regulation forbids Kickstarter investors to really be investors: functionally, they are donating, not investing. A successful investment on Kickstarter is just a pre-order. As such, there is a life cycle on when Kickstarter as it exists now can work. When the buzz dies down, reality will set in, and people will take their money elsewhere - risk without reward is an emotional expenditure, driven by the love for a particular product. As we old folks know, love only gets you so far in a long term relationship. When the rosy glasses come off, relationships need to make sense to last. And, frankly, it doesn't make sense to introduce risk *and* long wait times into the process of purchasing when so many immediate and secure alternatives exist online.

What I would like to see is an investment clearinghouse without the institutional bias or byzantine regulatory schemes of existing trading floors. Crowd funding with actual accountability. There would be risk, and there would be failures, but a success in such an endeavor could unlock unbelievable amounts of wealth, making it all the easier for entrepreneurs with great ideas to hook up with every day investors and enabling those investors to see a return. The SEC has made it clear they will do everything in their power to make such alternatives impossible within the US. The FedGov will allow experimentation when it comes to allowing monied institutional investors, clearing houses and banks the ability to create exotic securities, but are adamantly opposed to the possibility of experimentation that could serve as an alternative to the traditional clearing houses.

Why is allowing people to do what they want with their own money such a revolutionary idea?