Title III of the Jumpstart Our Business Startups Act (“JOBS Act”) of 2012, “may be cited as the ‘Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012’ or the ‘CROWDFUND Act’”. No, as ridiculous as that sounds, I didn’t make it up. See? It has quotes around it. The CROWDFUND Act creates a vehicle for funding platforms to provide startups a means to find the capital that they need to see their dream projects come to fruition.

OUYA is a video game console scheduled for release in April 2013. It is specifically designed for the TV and runs on the Android OS, an open source system. An open source system indicates a software or system where the source code is published and can be used to create derivative works or be redistributed without paying royalties or fees to the creator of the original product.

OUYA runs on Android 4.0, which will allow any game that has previously been published on the Android’s Google Market, to be playable via OUYA.  The best part, it costs only $99. OUYA has teamed up with other companies to provide a variety of content; game streaming via OnLive, VEVO music videos, and TuneIn and iHeartRadio music applications.

Square Enix and NAMCO Bandai, well-known game publishers, will provide content to OUYA, which will now feature the legendary game series of Final Fantasy. Not enough? OUYA also has arranged to release an exclusive game called Human Element. So that’s Final Fantasy and exclusive content. Scared yet, Microsoft?

How did OUYA garner this much attention for a brand new gaming console? A Kickstarter campaign raised more than their initial goal of $950,000, breaking the website’s records by raising $2.5 million in under nine hours. OUYA’s campaign ended in August and it now has over 63,000 backers and have raised over $8 million, second highest in Kickstarter history.

Prior to Kickstarter, if someone had an idea they needed to find their own capital. Businesses might go to their friends, family, or approach larger companies and angel investors to help provide funds for their idea. Kickstarter provides individuals with an avenue to advertise their idea, garner interest, and raise capital all at the same time. For this service, Kickstarter charges a 5% fee to the funds raised by projects. It indicates, however, that the project creators maintain 100% ownership of the project and the backers are simply, “supporting projects to help them come to life, not financially profit.” Kickstarter even includes a disclaimer that there are no securities or equity involved and that the allocations of money will be treated as donations.

The JOBS Act strictly refers to people engaged in crowdfunding as investors. The JOBS Act sets out restrictions on how much a company can raise via crowdfunding, how much investors can invest dependent on their net income, and how those funds are gathered and dispersed, via funding platform or other resource. Some believe that the JOBS Act is simply an avenue for startups to “skirt securities laws”. However, the JOBS Act is tied up in SEC review, as the SEC wants to further establish various investor classes in order to confirm an investor is accredited.

The first group of OUYA consoles are set to ship in March to the first backers of OUYA and after that, the console will be available to the public for $99 per console. In return for investing in the campaign via Kickstarter, investors were offered “rewards” which do not include shares in the company or any sort of equity, in accordance with Kickstarter policy. Instead the rewards include the OUYA platform and other OUYA related items including a Founder emblem displayed next to their user name, depending on how much one has donated.

For now those 63,000 backers of OUYA will have to be satisfied with getting their new video game platform instead of owning a piece of a potential billion dollar company. Since the CROWDFUND Act will allow for Kickstarter to expand their rewards to include equity, it will be interesting to see if and when the company does.