FORTUNE — The backlash to Facebook’s planned $2 billion acquisition of reality headset maker Oculus VR has been swift and vehement.
No surprise there — users frequently complain when a beloved service or app gets snapped up by a larger company. Users revolted when Facebook (FB) bought Instagram. They revolted when Yahoo bought Tumblr. They revolted when Facebook bought WhatsApp.
But this time, it’s different. The sale of Oculus VR is the first major acquisition of a company that got its start through crowdfunding. Not only do certain users feel a special connection with Oculus, they have supported the company with actual dollars from their wallets. The company raised $2.4 million from 9,522 Oculus supporters through a Kickstarter campaign in September 2012.
Since the deal’s announcement last night, many of those backers have left bitter and disappointed comments on Oculus’ Kickstarter page. Some have a general distaste for Facebook. Others feel betrayed that Oculus sold out before it even shipped a single consumer-facing product.
Some even are suggesting that they got ripped off by Oculus and Kickstarter. Business Insider bemoaned that Oculus’ Kickstarter backers “got nothing” in the sale. Gawker editorial director Joel Johnson referred to the deal as “Oculus Grift.” Markus Persson, creator of the popular game Minecraft, wrote, “I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition.”
It’s easy to feel that way when the big winners in this acquisition are the venture capital funds which invested in Oculus after its Kickstarter success. Spark Capital, Matrix Partners, and Founders Fund invested $16 million at a $30 million pre-money valuation last summer. Then Andreessen Horowitz led a $75 million Series B round a few months later at a $200 million pre-money mark. Facebook’s purchase earns those funds a big fat return in less than one year.
But this is where things break down. Much of the ire directed at Oculus and Kickstarter boils down to a misunderstanding of how crowdfunding works.
Backing a project on Kickstarter is not the same as buying equity. Supporting a project on Kickstarter is not the same as investing in a company. Pre-ordering an item on Kickstarter (which Kickstarter strongly discourages, by the way) is not the same as acquiring shares in that product’s maker. Bottom line: Kickstarter is for donations, not investments.
Kickstarter makes this much clear in its guidelines:
Further, Kickstarter makes it clear that it takes no responsibility for creators fulfilling their promises to backers:
In other words: Want to support a project? Great. Don’t go crying to us if things don’t work out the way you wanted them to. We’re all adults here.
Blaming Oculus doesn’t get you very far either. Here’s what Oculus promised in its initial Kickstarter offer:
That’s a very specific goal, which the company made good on when it shipped its first round of developer kits. In addition to the kits, the company offered backers things like T-shirts and posters. Three supporters pledged $5,000 or more, which earned them a paid-for trip to the Oculus office. The company even told non-developers not to pre-order the kits. “If you’re not a developer or hardcore enthusiast, sit tight for now. We promise the consumer Rift will be worth the wait!”
Nowhere does the company promise it will never raise venture capital, nor that it won’t sell out along the way. Disappointing as that outcome might be for early backers, Oculus does not owe them anything but a very gracious “thank you” for their donation.
Instead, this backlash would best be directed at the Securities and Exchange Commission. Why? Because maybe if equity crowdfunding were legal, they’d be getting a payday (albeit very, very tiny one) out of the Oculus deal.
A piece of legislation designed to legalize equity crowdfunding — called The JOBS Act — was signed into law two years ago next week. But the SEC neglected to write the necessary rules for 18 months, due largely to fear-mongering (“This will cause another Madoff scandal!”). It finally got around to issuing draft rules last October, but actual implementation remains in a state of limbo.
Oculus VR is a promising company with a long road of development ahead of it, fast-moving competition and no meaningful near-term revenue in sight. Kickstarter is a platform that has made its hands-off role in project crowdfunding very clear. The venture funds are trying to earn a return on behalf of their limited partners, which include pension funds, universities, and family offices.
Until the SEC implements the crowdfunding part of the JOBS Act, only accredited investors like venture funds can buy equity in private companies. Any Oculus backer who wishes he or she’d been able to invest should call their Congressman, not complain on a comment board.