KickStarter CEO To CrowdFunding Guru, a Brexit Boost

Yancey Strickler, the co-founder and CEO of Kickstarter, the world's largest online crowdfunding platform, sees Berlin -- and its growing cadre of entrepreneurs -- getting even bigger as Britain leaves the E.U.
Kickstarter teader image with play button

 

 

Bankers may not be the only migrating professionals moving to Germany in the wake of Britain's decision to leave the European Union.

According to internet pioneer Yancey Strickler, the 37-year-old co-founder and chief executive of Kickstarter, the world's largest online crowdfunding platform, not just finance wizards but all sorts of digital creatives and entrepreneurs will soon be streaming into the German capital.

"It seems likely that the gravitational forces will shift to Berlin from London, and that creates an interesting set of opportunities and challenges,'' he said during an interview at Tech Open Air, one of Berlin's big trade fairs for digital entrepreneurs, music and startups. "My guess is that there will be a large influx of money and entrepreneurs coming to Berlin.''

In just seven years, Kickstarter, which is based in Brooklyn, New York, has grown into the world's top online crowdfunding platform, and a major source of money and inspiration for new artists, gamers and digital entrepreneurs. Since April 2009, the site has collected more than $2.5 billion for more than 110,000 projects.

About 40 percent of Kickstarter projects end up being commercially successful, Mr. Strickler said, a much higher rate than for venture capitalists or other traditional investors. In 14 months since starting its German business, Kickstarter.de has raised €12 million in Europe's largest economy. It took almost three years in the United States to generate the same volume.

"This system has been catching on more and more in Germany,'' he said. "That just shows that people are understanding it, are more accustomed to it, and that it just bodes well for people launching a project today or tomorrow.''

Berlin is a magnet for creatives from Europe and beyond, Mr. Strickler said, and a good source of ideas and projects that qualify for financing through crowdfunding, which while at an early stage compared with the United States, is growing quickly.

The German capital is developing a profile as a hub for web innovations that focus on preserving digital privacy and personal data, an increasingly important niche as the digital economy takes over large parts of daily commerce, he said.

U.S. companies are striving for hypergrowth and centralization of platforms, but "I think Berlin has an opportunity to build products and advocate for the rights of individuals and end users, and to create a more decentralized web,'' Mr. Strickler said.

"I think this is what the internet sorely needs this is an opportunity for Berlin to really have a clear identity and answer a real need on the internet today,'' he said.

Crowdfunding through platforms like Kickstarter is more like patronage than investment, Mr. Strickler said, and most of Kickstarter's participants aren't motivated by returns, but a willingness to support a favored author, artist or digital games developer, and maybe get a free copy of the next book, or a film or game download.

In a country where alternative sources of financing are fewer than in the United States, crowdfunding sites like Kickstarter and Indiegogo, a U.S. competitor, have an opportunity to help German entrepreneurs realize projects otherwise impossible through conventional means.

But consumer protection regulations may be tightened in Germany in the wake of several high-profile bankruptcies that hurt small investors. If the rules are tightened too much, they could hamper online fundraising businesses like Kickstarter.

"I would hope an advanced society would be supportive of intelligent risk-taking on behalf of the people with new ideas,'' he said. Kickstarter, he added, is an alternative to conventional business, a way for the small entrepreneur or creator to realize their own dreams.

"We're in this investment mindset all around the world where the only ideas that are able to find support are the ones that seem like they can make somebody else money,'' he said. "So it's just the rich getting richer. On Kickstarter, there is no financial upside. It's simply: 'Here's an idea I'd love to do. I'd love to do it with a community of people. Support me and we'll all make this happen together.'''

 

Kevin O'Brien is the Editor-in-Chief of Handelsblatt Global. To reach him: [email protected]