One of the biggest issues with sites like Kickstarter is you go into it thinking you are going to help a company out with their project and get something in return. What you don't ever think is they can back out and give you nothing. Well, this is the case here or at least beginning to look that way.
Investing into projects especially startups can be risky, and that is why there are so many
regulations. As we get further into the 21st century, these regulations are becoming less and less, and people are being exposed to fraud in ways not seen before. Whether on purpose or not when you take someone's money say $300 and state you will deliver a product you are obligated to do so or face the consequences. What happens when you do this through a crowdfunding site like Kickstarter? Well, we are about to find out as
Pirate3D Inc raised nearly $1.5M on Kickstarter in 2013 and is not fulfilling its promises.Click to tweet
where there is going to be a number of regulators jumping up and down as Kickstarter is not a site that helps people invest into companies but a site that puts people in touch with products. So shares do not change hands but products do based on promises. This is a cross between and Amazon and Micro Ventures if you ask me. The big question is who will take the blame, the heat and eventually make good on this.
The Pirate3D Buccaneer raised a then-record amount of $1.438 million on June 29, 2013. The first printers were supposed to ship to backers in February 2014. Clearly that has not happened and as of September 2014, only 200 products had shipped as per a Tech Crunch report. Over a year later they still have not delivered. This is clearly fraud and outright theft wouldn't you think.
The founders said in a note to Kickstarter to backers that the company is sourcing new rounds of investment and found that investors want the new cash only to be used as working capital and not to fulfill previous obligations.Click to tweet
This is a hard one as you want to believe but can you. Kickstarter monitors submissions but also counts on its users to help police bad projects. Recently a facial razor that uses lasers called The Skarp netted over $4 million on Kickstarter but was pulled from the site after the creator failed to provide suitable imagery. The Skarp quickly made its way to Kickstarter-competitor Indiegogo where it’s raised, at time of publication, $217k.
We will see where this goes and what kind of backlash not only the company gets but the crowdfunding industry as a whole. THIS IS NOT THE FIRST TIME AND NOT THE LAST AS WELL. THIS TIME THOUGH IT HAS POTENTIALLY COST PEOPLE MILLIONS.