Crowdfunding a previously venture-funded education project. Possible?
August 19, 2014 3:26 PM   Subscribe

Scenario: Funded by a well-known VC, a previously successful (sold last company to Motorola) creates a (hyperbole, aside) revolutionary video instruction platform that *eliminates* bandwidth constraints, worldwide, at the same time increasing the capacity for student interaction by an order-of-magnitude and optimizing data analysis capacity of educational video.

The company deployed in India, enrolling 200K+ students to high praise, but failed to scale due to its refusal to pay off bribes to Indian government and education officials. The company is essentially dormant (with one licensee) and all Intellectual Property patented and intact. The entrepreneur bought back her equity in the company from the VC; she owns it outright.

The company has been introducing its video education platform to American foundations and other education entities, to high praise - including MOOCs, publishing companies, etc.

The company needs cash to get off the ground; it has pursued strategic relationships with some of the aforementioned institutions, but the process is painfully slow, and burdened with "not invented here" perceptions from those institutions, in spite of their strong support for thew platform. This has been monumentally frustrating. It is essentially a re-start. The company (currently, in stealth) wants to make a difference because it can enable anyone on earth, regardless of bandwidth constraints.

Does a company like this qualify for crowdfunding assistance form the likes of Indiegogo or Kickstarter? I have read the rules at Indiegogo and Kickstarter, but I can't tell from their rule sets whether a company like this would be able to attempt a crowdsourced effort.

Any other thoughts or ideas are appreciated. It's amply apparent to me (and others who have seen it) that this video education platform is truly revolutionary (I have spent considerable time in the space). It would be a shame to let this company and the platform it has created, die.
posted by Vibrissae to Education (11 answers total) 1 user marked this as a favorite
The entrepreneur bought back her equity in the company from the VC; she owns it outright.

Then she can do anything she wants with it, since she owns 100% of it. Kickstarter or Indiegogo would be ways to fundraise, but keep in mind neither offers equity, so she'd still own 100% of it after fundraising, any campaign would likely be a plea for seed funds to kick it off the ground and get it released on the open web.

But given what you describe here, it sounds like they should try raising VC funds again.
posted by mathowie at 3:41 PM on August 19, 2014 [1 favorite]

I suppose my answer falls under the "any thoughts" part of your question:

When you say this:

The company needs cash to get off the ground in

I am left wondering why the owner of the technology has not shaken more trees with venture capitalists in Silicon Valley?

If the idea is truly self evidently revolutionary as you say it is, the person who owns the technology should have no trouble getting funded by Silicon Valley VCs. If they won't touch it, I would suggest there may be a problem with the technology that you are not aware of.

Kickstarter is more for creative visions that don't have ready avenues of funding or are wild and visionary enough to be ahead of their time and scary to investors. I think it's morally questionable and not really in the spirit of Kickstarter et al to fund companies that will (if successful) make other people rich, when there's already a well established path for funding (Silicon Valley) that doesn't build a corporation on the generosity of small donors with no investment return to them.
posted by jayder at 3:52 PM on August 19, 2014

Response by poster: If the idea is truly self evidently revolutionary as you say it is, the person who owns the technology should have no trouble getting funded by Silicon Valley VCs. If they won't touch it, I would suggest there may be a problem with the technology that you are not aware of.

For context: the entrepreneur has approached VCs; his original VC refused a 2nd round because they were getting out of the education space. As for follow-on finding by a VC, it is very, very difficult to gain "fresh" capital from a VC unless one's original funder supports a new round. Attempting to "start new" with another VC is nigh impossible in SV. I have been in and around the VC space for two decades; many, many superb ideas and companies are overlooked by VCs!

The company in question is willing to go to non-profit status, if necessary. The technology works, and is proven. My query comes as a result of seeing a superb, massively helpful technology end up in a waste bin because of a weird confluence of events and misfortune. In a long career, I have not see a more promising technology for educating via video transmission. It's frustrating, in the extreme. btw, the main goal is not to get rich, but to get education to the masses that cannot currently access education.

Hope this helps.
posted by Vibrissae at 4:28 PM on August 19, 2014

I think you're focusing overly much on the education market.

You claim:

a (hyperbole, aside) revolutionary video instruction platform that *eliminates* bandwidth constraints

If this is the case, this platform is marketable in many market spaces and would immediately get the focus of many VCs. For instance, consider what Netflix or Youtube would do if they didn't have to pay for extra bandwidth.

You are combining a technology with an application when it sounds like the technology by itself is marketable. From a VC perspective, why pay for a single application for a technology when they can just buy the technology itself?
posted by saeculorum at 5:39 PM on August 19, 2014 [1 favorite]

Maybe find a successful existing project that can benefit from the technology, and partner with them. Reading Rainbow just raised over $5million on kickstarter, and video bandwidth is an issue for them. Kahn Academy would be another.
The cynical side of me thinks this is a reboot of Pixelon
posted by Sophont at 6:41 PM on August 19, 2014

I wouldn't waste too much time/thought on the suggestion to seek VC money again. VCs are herd animals. Once one of them has been spooked by a project, its pretty unlikely that any others will be brave enough to invest, or even engage.

Saeculorum, I suspect your may be reading too much into the phrase you highlighted. I'd read this as something that is novel in the video education platform space, that doesn't mean that it would be novel to someone like Netflix. If I'm wrong and you are right though, yeah, they need to focus on the big win here.
posted by Good Brain at 6:55 PM on August 19, 2014

Response by poster: Thanks, Sophont. And, no, it's not Pixelon; the latter was a phony video compression scam.

The platform under discussion does not compress video; it uses a different approach and is particularly effective with articulated video lessons - similar to what one would see coming from Khan Academy, MOOCs, etc.

We were recommended to Khan Academy by one of their primary funding sources. With due respect to KA, who have created an amazing educational resource, the technology company in question was unable to gain an audience with anyone at KA for weeks. When they finally did, the KA person had not read the technology brief, and did not provide proper time for a demo. What was most frustrating about that experience is that we actually converted a KA video (typically 35-40Mbyte, per video) to the platform ( a very simple process), reducing its size to just under 2Mbyte, and able to stream it over as little as 56kbyte. The data result from an articulated educational video in this platform is so lightweight that 100 hours of *interactive* lecture can be contained on a 4Gbyte data card and played on a cell phone or CD player.

In addition, the nature of the platform reduces language localization cost, and time, by a factor of 7x-10x.

In sum, this platform would enable KA to truly meet their claim of "educator to the world" - i.e. they could reach everyone - something they are currently *unable* to do, because of bandwidth constraints. Sebastian Thrun, in last years CHE, talks about the constraints brought to online learning due to limited bandwidth.
posted by Vibrissae at 6:58 PM on August 19, 2014

Response by poster: Here's the Sebastian Thrun link
posted by Vibrissae at 7:05 PM on August 19, 2014

If it's really that kind of revolutionary non-bandwidth-using whatever, and it's proven tech, all she needs to do is call Google or Netflix and decide how many zeroes she wants on the cheque they will cut her yesterday.
posted by feckless fecal fear mongering at 7:50 PM on August 19, 2014 [2 favorites]

Crowd funding could provide seed money of some sort, but you'd need a compelling pitch describing what that seed money would deliver. At some you'd need to go back to the deep pockets. It sounds like the platform is already significantly developed; that's what seed money would be used for, but it's already done.

There are many non profit avenues you could explore. The Gates Foundation has invested hundreds if millions of dollars in education. Brewster Kahle might be interested in something like this. Perhaps Wikimedia or the Mozilla Foundation?
posted by alms at 8:47 PM on August 19, 2014

Every military organization does lots of training/education, and in the field bandwidth can be limited.
posted by Sophont at 3:22 PM on August 23, 2014

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