There have been many threads here about using Kickstarter, and I will admit that I am constantly on the skeptical side and for good reason.
Here's a few Kickstarter projects that got a crap load of press, hype, and funding, only to turn out to be frauds or just straight out took the money.
The Peachy Printer
The Peachy Printer had high hopes way back in 2013 when it first launched as a $100 3D printer that fits on your desk without breaking the bank. The project raised more than 600,000 Canadian dollars and promised to ship the gadget within several months. Now its co-founder is telling backers that more than CA$300,000 has been embezzled by a fellow partner, and is urging backers to contact the local police.
Kickstarter Money Embezzled to Build a House in Canada | Digital Trends
Hybra Advanced
When we last caught up with Hybra Advance Technology in July 2015, co-founder Joe Thiel told us the company’s legion of disgruntled Kickstarter backers, who forked over nearly $550,000 in 2013 to help Hybra develop wireless headphones called the Sound Band, would soon be made whole.
Hybra's Kickstarter Backers File Complaints, Allege Fraud---And Wait | Xconomy
Not Kickstarter, but a start up defrauding venture capitolist just like any other ponzi scheme. Jonathan Mills
Former Motionloft CEO Jonathan Mills has pled guilty to two counts of wire fraud. The San Francisco entrepreneur, who raised funding from Mark Cuban, was arrested by the FBI in February. He admitted to spending "substantial amounts" of his victims' money on "vacations and other entertainment," like that time he hired Grammy-award winner Miguel (above) for a private show and numerous trips to Vegas.
http://ift.tt/1viCT3X
And then there's what's being called one of the largest VC/ Start up frauds ever.
Theranos who raised at least $750 million from investors valuing the company at $9 billion in February 2014.
Basically they never had an actual product, or even a proven concept. They just raised a crap load of money promising that they did and then tried to hide the fraud while they desperately tried to actually invent what they said they already had
"Theranos, a company that makes low-cost blood tests, has been celebrated as the inventor of the next major medical breakthrough, and its founder, Elizabeth Holmes, has been hailed as the next Steve Jobs. But in an expose published today, The Wall Street Journal portrays Theranos as a company that is not only grossly under-delivering on its promise, but is also working hard to hide its problems.
http://ift.tt/1ZYYGuu
There are a ton of stories of Kickstarter and VC/Start Up fraud that go back to the early 90's. But you'd never hear them unless you frequented tech blogs and podcasts that talk about those issues. There's so much focus on the successes, which are actually exceptions, that we start to think that an idea is the finish line. That getting investment means that everything is going to be "A-OK. You've made it".
Reality is, the failure rate and rate of fraud and hucksters in tech and other kinds of funded start ups is the same as it's ever been in business. You still need to have your head on straight and actually deliver and run the company. Investment is debt. Debt that expects to be paid back.
So when I'm critical of Kickstarter ideas, it's because the odds of it working are so slim even if you have something completely brilliant, because the kind of people who contribute to kickstarters are weary of getting burned every time something that sounds good comes along. If you aren't thinking of how to combat that stigma, do some real marketing, and think you're just going to plop something up and people will magically throw money at you like it's 1999, you're kidding yourself.
Do you guys ever back Kickstarters? Ever been burned?
Do stories like these make you less likely to trust Kickstarters in the future?
Here's a few Kickstarter projects that got a crap load of press, hype, and funding, only to turn out to be frauds or just straight out took the money.
The Peachy Printer
Quote:
The Peachy Printer had high hopes way back in 2013 when it first launched as a $100 3D printer that fits on your desk without breaking the bank. The project raised more than 600,000 Canadian dollars and promised to ship the gadget within several months. Now its co-founder is telling backers that more than CA$300,000 has been embezzled by a fellow partner, and is urging backers to contact the local police.
Hybra Advanced
Quote:
When we last caught up with Hybra Advance Technology in July 2015, co-founder Joe Thiel told us the company’s legion of disgruntled Kickstarter backers, who forked over nearly $550,000 in 2013 to help Hybra develop wireless headphones called the Sound Band, would soon be made whole.
Not Kickstarter, but a start up defrauding venture capitolist just like any other ponzi scheme. Jonathan Mills
Quote:
Former Motionloft CEO Jonathan Mills has pled guilty to two counts of wire fraud. The San Francisco entrepreneur, who raised funding from Mark Cuban, was arrested by the FBI in February. He admitted to spending "substantial amounts" of his victims' money on "vacations and other entertainment," like that time he hired Grammy-award winner Miguel (above) for a private show and numerous trips to Vegas.
And then there's what's being called one of the largest VC/ Start up frauds ever.
Theranos who raised at least $750 million from investors valuing the company at $9 billion in February 2014.
Basically they never had an actual product, or even a proven concept. They just raised a crap load of money promising that they did and then tried to hide the fraud while they desperately tried to actually invent what they said they already had
Quote:
"Theranos, a company that makes low-cost blood tests, has been celebrated as the inventor of the next major medical breakthrough, and its founder, Elizabeth Holmes, has been hailed as the next Steve Jobs. But in an expose published today, The Wall Street Journal portrays Theranos as a company that is not only grossly under-delivering on its promise, but is also working hard to hide its problems.
There are a ton of stories of Kickstarter and VC/Start Up fraud that go back to the early 90's. But you'd never hear them unless you frequented tech blogs and podcasts that talk about those issues. There's so much focus on the successes, which are actually exceptions, that we start to think that an idea is the finish line. That getting investment means that everything is going to be "A-OK. You've made it".
Reality is, the failure rate and rate of fraud and hucksters in tech and other kinds of funded start ups is the same as it's ever been in business. You still need to have your head on straight and actually deliver and run the company. Investment is debt. Debt that expects to be paid back.
So when I'm critical of Kickstarter ideas, it's because the odds of it working are so slim even if you have something completely brilliant, because the kind of people who contribute to kickstarters are weary of getting burned every time something that sounds good comes along. If you aren't thinking of how to combat that stigma, do some real marketing, and think you're just going to plop something up and people will magically throw money at you like it's 1999, you're kidding yourself.
Do you guys ever back Kickstarters? Ever been burned?
Do stories like these make you less likely to trust Kickstarters in the future?
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