On Tuesday, Facebook announced its plans to acquire Oculus VR, the creator of a virtual reality headset called the Oculus Rift. As Oculus wrote in a statement, the company started “with a vision of delivering incredible, affordable and ubiquitous consumer virtual reality to the world.” It secured nearly $2.5 million in a successful Kickstarter campaign in 2012.
Early backers of Oculus are not happy with the deal, according to the New York Times. They don’t want to develop software using a platform owned by Facebook, which collects user information for profit.
An announcement of the deal on the Oculus website had 917 comments as of press time — and they’re almost all negative. “I guess you might as well go full-evil when selling out,” wrote commenter Dave Alston. “This is a corporation that was supposed to deliver us a product that has only existed in people’s dreams and has delivered those dreams over to a corporation that has continually betrayed the trust of its consumers,” wrote another commenter named Steve Granzyk.
“Well you just officially abdicated your position as the Great Hope for [virtual reality],” wrote a third user named Jack Beachwood. “I hope you are content with 3-D advertisements and social games. It is immensely disappointing that you have chosen this course, as it clashes directly against [sic] what you have been espousing over the past year.”
Oculus supporters are upset, but there’s not much they can do beyond boycotting the company’s platforms. Even the people who supported Oculus financially via Kickstarter are not technically investors. They have no legal rights if the company sways from its stated mission. If they had funded the company under the impending rule from the Securities and Exchange Commission (first laid out in the JOBS Act), would they have had more influence over the deal?
Probably not. For one thing, Oculus secured more than $90 million from venture capital firms after its Kickstarter campaign. It’s unclear exactly how crowdfunding will play out under the new rule, but if the same had happened under crowdfunding rules, those VC firms might have opted to buy out early funders. The company could also have pooled crowdfunded investors into a collective that got only one shareholder vote.
The rift between the firm and its early supporters centers on Oculus drifting from its mission. Would things have been different if Oculus VR were, say, a benefit corporation? (Benefit corporations are an alternative to other corporate structures, and they require for-profit firms to consider society and the environment alongside profit when they make decisions. More than 900 companies are benefit corporations, including Ben & Jerry’s, King Arthur Flour and Patagonia.)
It’s possible. But companies have to make a concerted effort to become benefit corporations, and they don’t make the switch lightly. A firm like Oculus, which may have hoped to be acquired, wouldn’t want to change its structure in a way that might jeopardize a potential deal with a Facebook or any other tech giant. Still, if benefit corporations become more common, perhaps investors that participate in crowdfunding will seek them out in hopes of getting a stake in a company that remains true to its mission.