3 reasons to invest in a Kickstarter IPO

Kickstarter is moving from the geeky fringe into mainstream consciousness, and that has investors taking note. Here are three reasons to consider investing in a Kickstarter IPO if and when we see one.

It’s hard to walk a few steps at my office without hearing someone talking about the latest business idea they saw on Kickstarter.com. It’s a sign the site’s moving from the geeky fringe into mainstream consciousness. And it makes me wish I had the opportunity to buy Kickstarter stock. Here are three reasons to consider investing in a Kickstarter IPO (if and when we see one):

1) A built-in revenue stream. Cash flow is one of the biggest problems with tech start-ups. Couple a high-growth tech company with actual revenue, then, and you’ve got a hot commodity in the Silicon Valley.

Kickstarter has a simple way of raking in cash, too: it takes 5 percent of whatever gets raised. Now that we’ve seen a project pull in more than $6 million in days, Kickstarter’s generating real greenbacks.

2) Phenomenal growth. Kickstarter helped fund 3,910 projects in 2010. That was good for $27,638,318 dollars pledged, and a project success rate of 43 percent (per Kickstarter’s blog). One year later in 2011, Kickstarter funded 46 percent of its posted projects for a total of 11,836 projects worth $99,344,381. Kickstarter’s cut in 2011? $4.97 million.

Per VentureBeat, “Kickstarter is on pace to raise around $300 million this year, triple what it did in 2011.” $15 million of that would go straight to Kickstarter.

3) Investor interest. Deep-pocketed venture capitalists are excited about Kickstarter. When asked what private companies he was eyeing now that Facebook’s going public, Jason Jones, managing partner of High Step Capital, named three companies: Kickstarter, Etsy and Quora (per InsideIPO).

Kickstarter shares aren’t yet available on Secondmarket – a site where wealthy investors can buy and sell shares in private companies – but investors are excited for them to arrive. Interest in Kickstarter shares grew by more than 93 percent in 2011, Secondmarket says.

All that said, the only thing better than a Kickerstarter IPO might be an announcement that the company’s turning itself into a non-profit. That would keep costs down and goodwill up in the years to come. If we don’t get that, though, I’ll take the next best thing: Kickstarter stock.

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