The Peachy Printer - The First $100 3D Printer & Scanner! ...has imploded.

[edavid]

A private company owner is allowed to take whatever salary they like, even half if they so chose to.
If a company takes in say $1M and thinks (and has a plan for) they can deliver to customers using only 100k of that money, there is nothing at all legally wrong with the owner(s) paying themselves  $900k in salary. The rest comes down to regular consumer law about goods not supplied etc.

Of course, but there have been people looking at the pie chart and claiming that the "good" founder took *all* that salary himself, when in fact he hired and paid several other people out of it.

[edavid]

Not that Kickstarter backers are creditors in any case.

Bingo. They are just customers who didn't get their goods. But worse than that, they are customers who put in money in full knowledge that product did not yet exist and must be developed and there were risks in that.

I don't think that's correct.  If they ordered a product and didn't get it, they do have a claim.  There are just not many bankruptcies where there is enough money to pay people that far down the chain.

The idea that the crowdfunding backer agreement would shield the company from such claims has not been tested at all.

[Kilrah]

I don't think that's correct.  If they ordered a product and didn't get it, they do have a claim. 

All major crowdfunding platforms make it pretty clear that you are an "investor" and not a "customer", and that you are not "ordering" anything, only subscribing to hopefully receive a perk as a thank you for supporting the project should it actually succeed. I.e. no guarantees of any kind for you, and no obligation at all for the project's creator.
The only thing they may have to do if accused of fraud is showing a decently viable plan suggesting things had a non-zero chance of working out if they don't - and pretty much anyone can do that easily.

[edavid]

All major crowdfunding platforms make it pretty clear that you are an "investor" and not a "customer", and that you are not "ordering" anything, only subscribing to hopefully receive a perk should the project actually succeed. I.e. no guarantees of any kind for you, and no obligation for the project creator beyond showing a decently viable plan suggesting things had a non-zero chance of working out if they don't.

We've gone over this so many times 

- Backers are definitely not investors, because they have no chance in sharing in the possible success of the project creator.

- The crowdfunding platforms assert that backers are not customers, but they don't get to decide that.  It's a matter of law, which has not been settled (or even tested) yet.

[uncle_bob]

All major crowdfunding platforms make it pretty clear that you are an "investor" and not a "customer", and that you are not "ordering" anything, only subscribing to hopefully receive a perk should the project actually succeed. I.e. no guarantees of any kind for you, and no obligation for the project creator beyond showing a decently viable plan suggesting things had a non-zero chance of working out if they don't.

We've gone over this so many times 

- Backers are definitely not investors, because they have no chance in sharing in the possible success of the project creator.

- The crowdfunding platforms assert that backers are not customers, but they don't get to decide that.  It's a matter of law, which has not been settled (or even tested) yet.

Hi

In a normal "we need money upfront" deal (regardless of what you call it) there will be a variety of protections in a contract. That's the way a million or two dollars normally trades hands. That's where most (99%) of the protection comes from. Crowd funding eliminates the contract. You then fall back on a bunch of laws that vary enormously from location to location. They were not written with this in mind. For the most part they date (at best) to the 1800's. Good luck untangling an international group funding snafu using them .... This all took place in one state didn't it?

Bob

[jancumps]

I don't get it ?? He's in this youtube video interviewing the dude that ran off with the loot ?? Why isn't he beating the crap out of him 

Yup, it's the most bizarre thing I've ever seen.

Extremely bad acting too...  My toes got in a cramp when I watched that video for the first time.

[snoopy]

I don't get it ?? He's in this youtube video interviewing the dude that ran off with the loot ?? Why isn't he beating the crap out of him 

Yup, it's the most bizarre thing I've ever seen.

If it quacks like a scam and walks like a scam then it must be a scam !!

I bet that what they had was only a partially working prototype that was never going to work unless they poured tons of other peoples money into it. Somehow the dude who ran off with the loot knew it was never going to work so decided to cut his losses and enjoy the spoils

[Corporate666]

The founder of this thing (apparently) pulled off one of the greatest heists of all time.  He has successfully absconded with the majority of the money while taking no blame whatsoever.

There's nothing to indicate that if the rest of the money wasn't pilfered, that they would ever have delivered on anything.  I'm dumbfounded that the backers of this thing are so easily distracted and fooled by a horrendously ill conceived and executed video.

[EEVblog]

The only thing they may have to do if accused of fraud is showing a decently viable plan suggesting things had a non-zero chance of working out if they don't - and pretty much anyone can do that easily.

Exactly.
There is no law against being incompetent at engineering and/or business finance.

[EEVblog]

- The crowdfunding platforms assert that backers are not customers, but they don't get to decide that.  It's a matter of law, which has not been settled (or even tested) yet.

Correct. In Australia for example, we have decent consumer protection laws, and I suspect a crowd funding contributor will likely win if they the "perk" they backed was a deliverable product. A promise of a product is essentially a verbal agreement which is actionable under consumer law.

Also, as far as the tax department is concerned in Australia, crowd funding contributions are not donations (nor investments), they are income from sales (because a promise was made on a specific product for delivery), at least for "reward" based crowdfunders i.e. a promised product.

[snoopy]

- The crowdfunding platforms assert that backers are not customers, but they don't get to decide that.  It's a matter of law, which has not been settled (or even tested) yet.

Correct. In Australia for example, we have decent consumer protection laws, and I suspect a crowd funding contributor will likely win if they the "perk" they backed was a deliverable product. A promise of a product is essentially a verbal agreement which is actionable under consumer law.

Also, as far as the tax department is concerned in Australia, crowd funding contributions are not donations (nor investments), they are income from sales (because a promise was made on a specific product for delivery), at least for "reward" based crowdfunders i.e. a promised product.

That should apply to churches and religious organizations as well because they are always trying to flog gold passes to heaven to the gullible in exchange for their material money

cheers

[Kjelt]

I don't get it ?? He's in this youtube video interviewing the dude that ran off with the loot ?? Why isn't he beating the crap out of him 

Maybe he did, they did lock the door 

[snoopy]

I watched his second video last night. If what he is saying is an accurate account of what has happened then he has been dudded big time and so have all of the contributors to this campaign !! I kind of feel sorry for him because it reminds me of some of the deadbeats I have dealt with in business in the past. There's nothing worse than dealing with a sociopath or psychopath especially in a business arrangement. They will tell you any lies and manipulate you in such a way that you are not aware of. In the end you will lose money and countless hours of your life which equates to money. I always say to people that if you really want to know what someone is really like then go into business with them and pretty soon you will find out about the real person behind the mask !!

cheers