Several years back, Kickstarter tried to revive its ailing brand by pivoting to the blockchain. At the time, “web3″ was still a relatively new and exciting concept, and company leaders seemed to hope that a new direction might rejuvenate its business. In December of 2021, the company announced that it would be migrating its entire platform onto a blockchain protocol and pursuing new ways to make web3 a core part of its operations.
This idea was, for lack of a better term, a disaster. Many of the platform’s creators were horrified. Some were concerned about the environmental impacts of blockchain integration, while others worried that web3 adoption would cause cryptocurrency scams to take root on the site, thus tainting well-meaning crowdfunding efforts by association. Eventually, Kickstarter slow-rolled its plans. Not long afterward, Kickstarter’s CEO left the company. The new CEO made it known that the company had no plans to continue with the blockchain project, leading to a collective sigh of relief from creators and investors.
Now we finally know how this terrible idea came to be: An odd financial deal involving well-known venture capital firm Andreessen Horowitz (a16z). A new report from Fortune claims that the VC invested $100 million into Kickstarter, with the expectation that, in return for the financial boost, the crowdfunding platform would pivot its platform to a web3 infrastructure. The outlet notes that the partnership came together partially as the result of ongoing ties between Kickstarter’s founder, Perry Chen, and venture capitalist Chris Dixon, who leads a16z’s crypto division at the time. Dixon originally helped Kickstarter get its start by investing in the platform during the late aughts.
The idea to swap the money for a web3 orientation was pitched by Chen and other Kickstarter board members to Dixon in the summer of 2021, Fortune reports. The financial infusion from a16z was actually a “tender offer,” whereby a16z would essentially buy up shares in Kickstarter from staff in exchange for a generous stock buyout. Fortune reports that, in return for the cash, Kickstarter was expected to become a web3 company:
The grand but improbable plan called for shifting its entire platform onto a blockchain called Celo, another a16z portfolio company, where it would operate as an open-source protocol—akin to http or Bitcoin—rather than rely on the proprietary code model used by most tech firms. Users, meanwhile, would be able to create mini platforms of their own around niche interests like anime, bringing in more people and splitting any profits with Kickstarter.
Cleo, the blockchain project that Kickstarter planned to integrate with, was ironically considered environmentally friendly. Despite this, many in the Kickstarter community saw the web3 pivot as a betrayal of the company’s environmental stance. Gizmodo reached out to Andreessen Horowitz and Kickstarter for comment and will update this story if they respond.
A16z has made a lot of smart financial investments over the years (it can count Twitter, Facebook, Github, Groupon, and Airbnb as some of its fiscal victories) but it has also made a whole lot of bad ones, too. Its crypto investments, in particular, have been viewed as a relative disaster. Let’s be honest, web3 is a dumb idea and, at this point, it’s never going to take off. Its proponents could barely explain it. That hasn’t stopped the likes of a16z from continuing to invest in the space, which just goes to show that, despite constant intrusions from reality, some dreams may never die.
