This morning I received a backer email from the Peachy Printer CEO which said they are bankrupt due to the embezzlement of half their Kickstarter funds ($325k) by their financial officer. He used to build a new home, leaving their company unable to complete its product.
Their website has a full text account of what happened (peachyprinter.com) and we were sent a video with a confession and some other dramatics.
I really liked this little project and was excited to see what would happen with it. They made a really cool product and I was always excited to get updates. Unfortunately it seems the CEO put too much trust in his financial advisor and let him keep funds in his personal account.
I really liked the Kickstarter model, and watching products develop, but this trend of failing and/or scamming of crowdfunding supporters has really turned me off to the concept. As it sits I have invested in a total of 34 crowdfunding campaigns on Kickstarter & indiegogo.
Kickstarter:________
28 funded
23 received
18 on time
18 as advertised
Indiegogo:________
6 funded
2 received
1 on time
as advertised
The majority of the projects I received have been small single piece injection molded plastics or crafted leather. The larger more expensive projects seem to fail at a 70% rate in my funding pool.
Suffice to say that is not a good turnout. It looks bad on the community to the point there is a new company being put together to offer crowdfunding with some sort of responsibility behind it. We’ll see how that works out.
Having said all that it is nice to know that the glowforge has private backers, it was fully funded before the campaign, and there’s no sign of trouble from the team. I really hope that glowforge comes out of this as a shining example of how to properly fund and manage a product campaign, so that others in the industry will have something to go by, and the instances of failure like with the peachy printer will be greatly reduced. Your openness, honesty, and dedication to a good product has kept us around through the delays. Keep it up guys. We’re rooting for you and this awesome piece of gear
For real. I’m waiting for some company that has problems like this to buckle down and just come out if it respectably and deliver to everyone and be successful. I haven’t seen that happen yet. I hope peachy can do it, but it looks like they’re playing the victim card as hard as they can
Having him interviewed behind bars may have helped some people feel better about it. Or at the title office where he is selling the newly built house for a profit, and signing it over to the other guy.
[snip] At this point I was doing a massive derail, so I replied as linked topic instead
The most damaging part of this is that it’s spreading as a Kickstarter update instead of a criminal investigation. He frames it like his friend betrayed HIM and he’s talking about it in a YouTube video instead of in front of a grand jury.
That’s what echoes across the other crowdfunding examples. Embezzlement happens. Economic crime happens. But it’s dealt with by lawyers and criminal investigators, not you bringing this guy in front of a low quality camera and having him say how sorry he is. Nobody cares how sorry he is. They care if they’re going to get their product and/or their money back. They care if he’s going to jail.
Yeah I think it was handled pretty poorly. From what I gathered he recorded that video over a year ago alon with a written agreement by the embezzler to repay the money. He said if repayment was not completed he would have the video as evidence, which he did, and decided to release it to the Kickstarter group. Either way, so much drama that I really didn’t want to have in my life.
I’m also sad to see such a cool little project get so screwed up. I never really expected a product out of it, I figured it would be cool, but I wanted to back him just to see the process. I never would have if I knew I was buying someone else a house.
I’m sorry that happened to you. I’ve crowdfunded a few movies and the biggest disappointment I’ve come to is that I always spring for the “Get a DVD” level (which is surprisingly high) and I invariably get a link to where it’s streaming instead, at least 3-6 months after it was expected.
It sucks to put your trust in something, have it broken and then still try to be trusting again next time.
My second-to-last startup was similarly destroyed–an executive started taking out 5-figure “executive loans” (minus the legally mandated board approval, paper trail, etc.), falsified sales numbers to get high five-figure bonuses, and used the company credit card like his personal debit card (as in paying for his wife’s limo service and an $1,800 Modernist dollhouse for his toddler twins with it). It destroyed a business that was 12 years in the making, a dozen people’s jobs, and a prosthetic limb that made an enormous difference in people’s lives.
The video looked so fake it was like watching a parody of a corporate video. “I stole most of your money and golly gee wiz I really feel bad about it. Sorry about causing all this trouble, but I’ll do my best to get over it.” Even though I didn’t contribute to that Kickstarter, the next thing we need to hear about this is the start date for the trial.
