When you back something on a crowdfunding site like Kickstarter or Indiegogo, you do it because you like the idea and not only want to see it take off, but have faith that it will happen. When a campaign hits the million dollar mark, that faith turns to certainty. There’s no way a cool million can just go poof with little to nothing to show for it, right? Right?! Wrong. Crowdfunded startups imploding is no new phenomenon, but it’s starting to make the transition from tall tale and “once-in-a-blue-moon” ordeals to a disturbingly common plight. This is especially so when the failing startup happens to have pocketed over a million hard-earned bucks from the common man at large.
Some may remember a 2012 campaign for an advanced little drone called the TechJect Dragonfly. This drone was supposed to be tiny, have advanced tech giving it the ability to fly and hover like a real dragonfly, and only cost 99 dollars at retail. When the Indiegogo campaign crossed that $1 million threshold, backers and crew alike rejoiced. Given the time frame, back in 2012, this was considered a runaway success story. Yet here we all are three years later, reading an apology from the developers instead of flying around awesome robotic dragonflies. They blamed this blowout on Indiegogo and Paypal not releasing an undisclosed amount of funds, causing them to run short. This may sound like a sympathetic plight, but it’s only one of many these days.
Another resoundingly successful crowdfunding failure that comes to mind is Pirate3D, a project that promised a cheap and user-friendly 3D printer back in 2013. The Kickstarter campaign garnered more than $1.5 million, practically ensuring that backers would see the project come to life. Two years and only 40 percent of the orders have been fulfilled while the company talks about looking at additional ways to grab capital despite bringing the product to retail, saying that they do plan to fulfill the rest of the orders. This was before Kickstarter’s 2014 terms and conditions change that allowed creators to explain why they failed to deliver and what would be needed to complete the project as planned in order to get out of their promises to backers. This, of course, means that Pirate3D is ripe for the suing, if orders remain unfulfilled. In crowdfunding, there are no solid guarantees. There is also no way of knowing ahead of time if a project will flop, of course. Cases like these simply go to show that crowdfunding is risky and should be undertaken with a heavy dose of salt and only if you fully believe in the product on offer and the people promising it to you.