Crowdsourced Funding for Security Startups

"I have a great idea, but no money to do anything with it!" This circumstance has to be one of the most frustrating sentiments shared by tinkerers, tweakers, and freestyle designers today. The security industry seems dominated by huge conglomerates who have rigidly planned product development roadmaps, or by small, cash strapped manufacturers unable to fund side projects. Suppose you have a "million dollar idea", but no "million dollar R&D budget". What comes next?  In this note, we examine Kickstarter, a website sponsoring small scale venture capital investment.

Overview

First launched in 2008, the website's goal is the central concept of matching projects in need of capital with potential investors. Visitors to the opportunity are given a single page briefing by the solicitors, and the return on pledges are indicated upfront. A hallmark of most opportunities is the rather low price of sponsoring a project compared with traditional VC arrangements. Project sponsorship levels are typically 'tiered' in such a way that more valuable sponsorship pledges receive more product, service, recognition, or appreciation from the benefactors as the pledge amount increases. The scope of projects eligible for Kickstarter sessions are broad: film, art, music, literature, software, and technology devices have all seen successful sessions, with some projects having over $ 1 Million USD pledged.

The website receives it's funding through a percentage of total funds raised from successful individual projects. Not all projects are successful; if the project doesn't receive the goal amount of pledges within a pre-determined deadline, then no money is collected from sponsors. At the current time, Kickstarter reportedly experiences a 44% success rate for funding projects. The site claims over 20,000 projects have been successfully funded, and hundreds of millions of dollars pledged.

Outcome

Innovative security projects have the opportunity for funding based on their own merit, through 'crowdsourced' venture capital. Surveillance products like the 'OCULUS' security robot have already enjoyed successful Kickstarter funding sessions. OCULUS received over $25,000 in funding from just over 100 backers.

See our OCULUS product review for details on the offering.

It will be interesting to see what other types of 'niche' security technologies and products gain funding via Kickstarter, or other avenues like it. The concept is built on the premise of 'the best ideas find a way to reality'. We see Kickstarter as potentially being able to push the small security innovator one step further up the ladder of progress.