iCP2: They're throwing in the towel.

[vcoleiro1]

^ my understanding is Craig had a large chunk of the cash , probably in the order of $100k or so. If you believe the $500 a month , then over 12 months that equates to $6000. Where is the other $94k. What I'm saying is that this is another one of Craig's BS stories that sounds half feasible but is in fact just another smoke screen. Just like how he's selling his house to repay us or any of the other many BS stories he has come up with. The simple fact is that he had a large chunk of cash which is still unaccounted for.

 

[Exophase]

Craig should not have owed taxes on money he received for KS if he used an accrual method of accounting (a quick Google search shows this is an option in the UK as you'd expect it to be). On the other hand, this could explain how Craig was allegedly expecting a big tax refund a couple years ago. But seriously, filing the revenue under cash accounting would just be insanity.

I also wonder what this $500 a month is supposed to be about. He makes it sound like there's a big monthly fee just for keeping the company registered and there's no way that's true either. It's much more likely that these were rental costs for that area he had for assembly, that may have also been OP LTD's registered address and therefore needed to remain open.

It's still not really clear to me how much money Craig was allowed to take to pay himself as an employee of his company, outside of any liabilities that company has to meet its debts. If he was allowed to keep taking a full time salary the entire time that would have easily drained the money.

 

[vcoleiro1]

I'm sure he had a very nice holiday - in the US wasn't it?

 

[ekianjo]

I'm sure h had a very nice holiday in the US wasn't it?

Yeah he did mention that at some point.

Frankly I think the most likely explanation of what happened to the money is that Craig used it for routine living expenses while unemployed or underemployed.

You don't need 100k for living expenses unless you live in an expensive area and have expensive hobbies. Either he kept some of the money for himself on top of the said expenses, or he bought stuff with it that has nothing to do with living expenses.

 

[Exophase]

And why exactly are you so sure it's 100k that can't be accounted for in expenses?

 

[mcobit]

It could, but then the whole plan was bogus from the beginning and he should have collected double the amount. How can he not take this into account and then, surprise surprise, running a company and keep living costs money... really?


Edit: I would like to see his initial calculations for this project. If there are some.

 

[Exophase]

It could, but then the whole plan was bogus from the beginning and he should have collected double the amount. How can he not take this into account and then, surprise surprise, running a company and keep living costs money... really?

There's no way Craig would have (or should have) accounted for contingency money to keep paying salaries (even just for himself) a year after the supposed ship date. And we don't know what, if anything, he paid his sister and mother. Not that something like this should have ever involved anything other than fixed costs.

I guess he could have been making big payments towards the second mortgage he took on his home. I'd just consider stuff like this more likely than him spending tens of thousands on extravagant items, wildly expensive vacations (as opposed to moderately priced ones), or still having it shoved in a bank account somewhere.

What's most important isn't so much evaluating if he used the money ethically (I think most of us are pretty confident he didn't without knowing the specifics of what he spent it on) but whether or not he used it legally, and whether or not he used it in a way that would make him personally liable. I'm sure his Ltd can be forced into insolvency, but if it has no assets it's going to be moot. The important matter is going to be whether or not anyone will be able to get anything further from Craig personally.

 

[andmaz777]

Dragons Den would laugh at anyone saying they needed most of the investment to pay themselves a salary - this means that Craig had zero risk and a massive upside if the project had been successful.


Costings from the business plan need to be looked at - was there ever going to be enough funding for this project to work other than by the ridiculous target dates on the kickstarter?

 

[Exophase]

KS projects are a joke both from an investment point of view or from a store point of view. You miss a lot of protection as an investor or as a buyer, instead carrying all the risk. But this is a fundamental problem with Kickstarter and changes need to happen with them, rather than expecting bumbling project starters to actually behave responsibly and ethically 100% of the time without regulation and oversight. Requiring an actual legally binding business plan would be a good start. Without it, how can you say that Craig was violating anything?

 

[comradekingu]

That isnt true, and this is the change of events http://gamasutra.com/view/news/216887/Washington_sues_Kickstarted_game_creator_who_failed_to_deliver.php

 

[Exophase]

That isnt true, and this is the change of events http://gamasutra.com/view/news/216887/Washington_sues_Kickstarted_game_creator_who_failed_to_deliver.php

Everyone knows about this already. Try being specific in indicating how it invalidates what I said. You do understand that a lawsuit being opened, even by the government, doesn't actual set legal precedent right? There needs to be an actual court ruling. And if you seriously think that KS projects are going to be held always legally accountable in delivering on their pledge goals no matter what happens then you can pretty much expect KS to be shut down because it's impossible.

 

[ekianjo]

I guess he could have been making big payments towards the second mortgage he took on his home.  

 

Well thats not what i consider "normal" expenses. the KS project is about spending towards delivering a product, not maintaining the lifestyle of Craig.

There's no way Craig would have (or should have) accounted for contingency money to keep paying salaries (even just for himself) a year after the supposed ship date.

so are you saying he seriously expected to deliver it in a couple of months even though nothing was finalized? Even after the experience he already HAD with the Pandora?

 

[Exophase]

Well thats not what i consider "normal" expenses. the KS project is about spending towards delivering a product, not maintaining the lifestyle of Craig.

You're talking to me as if I support whatever he did with the money. There's no way I would personally find that acceptable. But if he's allowed to take any salary at all what exactly dictates what is and isn't within an acceptable range? Can you find a legal definition of it? Normally investors will have very specific contractual terms addressing what you're allowed to do with the money, but there isn't something like that for KS...

so are you saying he seriously expected to deliver it in a couple of months even though nothing was finalized? Even after the experience he already HAD with the Pandora?

Did I say that? I believe what I really implied was that he didn't expect to still be working on it a YEAR later.

Do you think this is wrong?

 

[ekianjo]

I believe what I really implied was that he didn't expect to still be working on it a YEAR later.

Again, he KNEW what happened with the Pandora. He was basically blatantly lying by expecting to deliver the icp2 by the end of the year, while still so many things were not fixed and decided. Manufacturing stuff (and preparing for it) takes TIME.

 

[ekianjo]

But if he's allowed to take any salary at all what exactly dictates what is and isn't within an acceptable range?

a proper KS project should mention why you need x amount of money and what you will use it for. As far as I know, people don't include the cost of their rent and living expenses when they do a KS project, because they usually focus on the EXTRA money they need to make some project happen. This KS was for the ICP2, not "ICP2, mortgage and Craig's pocket money for the years to come." 

 

[Exophase]

But you didn't answer the question, at least not as I intended it. You're focusing on what it should be, but what must it be legally? Do you know the answer to that?

Again, he KNEW what happened with the Pandora. He was basically blatantly lying by expecting to deliver the icp2 by the end of the year, while still so many things were not fixed and decided. Manufacturing stuff (and preparing for it) takes TIME.

If iCP2 were handled competently it probably could have been shipped within 3 months of the KS finishing. The PCBs were designed, they had a case design that they showed with prototypes, and the thing is much simpler than Pandora (especially mechanically).

Yes, the deadlines he did give were totally unrealistic, but that still has nothing to do with this idea that he should have anticipated it taking a year.

 

[rohezal]

This KS was for the ICP2, not "ICP2, mortgage and Craig's pocket money for the years to come."

The creation of a product needs (at least some people say so) a manager which needs to be paid. Of course you have to pay for the living of all people who are involved in the project, else they would starve, if they can't pay the rent and buy food for months. This would make the product impossible.

 

[Wrath Of Khan]

Indeed a masterclass in incompetence.

 

[andmaz777]

.......project a success then Craig is very rich otherwise he is paid what must have been a good salary and gets richer anyway.


The kickstarter was full of deceit like the working prototype, very nice delivery dates and ready for mass production wording.


So when that kickstarter finished it was not as advanced as represented and yet Craig still expected to be paid for the "extra time" that he caused - he was obviously hoping to sort the issues out very quickly but the gamble did not work - that gamble was with other peoples money - a great way of making money.

 

[erico]

I´ve always seen crowd funding like kickstarter and the many others as an agency of donations, there is where they came from in my books.

No consumer/investors laws apply. Donate as you must, believe as you will.

I don´t understand people trying to change that, like it was an investment or a pre purchase based on the pitch.