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Tip of the Hat: Facebook's Oculus buy a smart move

Mike Bucken | April 1, 2014
Facebook CEO Mark Zuckerberg faced a lot of criticism last week when his company agreed to pay $2 billion for a startup still building its first product, the Rift virtual reality headset.

Facebook CEO Mark Zuckerberg faced a lot of criticism last week when his company agreed to pay $2 billion for a startup still building its first product, the Rift virtual reality headset.

The company was started with crowdsourcing funds raised using the Kickstarter platform. Nearly 10,000 backers threw in a few hundred dollars for access to the company's development kits. The venture capitalists who followed the crowdsourcers invested more than $100 million.

Some critics have pounced on what they call the unfairness of the huge return gained by the venture capital investors, compared to the crowdsourcers' development kits. Others say the market for VR headsets is limited, and will never be as large as Facebook needs for an adequate return on its investment.

 

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