The internet community has been buzzing about Facebook’s acquisition of Oculus VR, the makers of the Oculus Rift virtual reality headset. Oculus received its initial funding on Kickstarter, the crowdfunding site where the community helped raised $2.4 million in the hope the company would be able to create an independent platform. Many of the initial donors are calling Oculus a “sellout” to Facebook. So, did Facebook get in these donors’ faces?

The issue stems from the tricky relationship between companies raising money on crowdfunding sites, such as Kickstarter and the people who donate to them.

Donors on these sites hope they can get interesting ideas off the ground. Donations have helped filmmakers raise money to start production, build prototypes of new equipment, or building a new tech platform. These donors should know that there is no expectation of equity in the company. However, what results from a sale such as Oculus by Facebook, the community gets punched out of being part of the start-up community as a bigger force takes over.


About Author

Jenna Sleefe is an in-house attorney for Internet Brands, Inc. Jenna's practice focuses on website aquisitions and privacy law. Jenna has experience drafting and negotiating various types of website agreements, advising clients on rights acquisition agreements and options, reviewing DMCA complaints, preparing and negotiating joint promotion alliances, clearing advertising copy and advising clients on contest and sweepstakes promotions, performing diligence in connection with mergers and acquisitions in the entertainment industry, forming limited liability companies and drafting operating agreements, and analyzing issues arising under online privacy and terms of use policies.

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