Kickstarter Nightmare

The FTC Kicks In Kickstarter’s Door To Stop Fraud

And it’s about time.

You want more big government?

Don’t get me wrong, I really don’t want to see the government start to regulate and clamp down on crowdfunding. I’ve personally backed a dozen or so campaigns myself, but there was always that worry, “Am I every really going to see this product?” Fortunately the Kickstarter campaigns I dealt with were on the level and never disappointed me. They did make me wait, but that’s to be expected in the crowdfunding experience. Then you start to hear about these Kickstarter nightmare campaigns. Last year Jyrobike, the auto-balancing bike, launched it’s campaign looking for $100,000 and was quickly funded and exceed its goal, then a month ago I read  a story about the inventor. His company’s board of directors, excited about the new influx of cash , started arguing over where the money should go. The inventor said, “To build the Jyro-Bikes every ordered.” The Board didn’t agree, voted the inventor out and never produced the bikes the backers had ordered. Now there’s two tragedies here, one is that the backers, who gave their money in good faith, never received their promised reward, of course. The other is that the inventor, the guy whose name was on the Kickstarter campaign, has had his reputation destroyed . He’ll never be able to run another crowdfunding campaign again.

Kickstarter and The Doom That Came To Atlantic City


I was told the cautionary tale of “The Doom That Came To Atlantic City” by a friend, and now partner in Move Rate 20 Games, who is familiar with the gaming industry. It’s a tale of how the creators of the game, Lee Moyer and Keith Baker, worked in good faith with a “friend?” who would manage their Kickstarter campaign to get it funded.  The campaign was a success, hitting $100,000 before even the first month, everyone was thrilled. Then slowly the updates from Erik Chevalier grew more and more infrequent. The backers wanted to know what had happened to the $122+K that had been raised and when would they be getting their game? On June 31st, 2013, a little over a year after the initial Kickstarter, Chevalier posted that the game studio had been shuttered and refunds would be forth coming. (You can read most of the posts here on the original Kickstarter page) Obviously the refunds never came and nothing was heard from Chevalier.

Tabletop gamesLuckily, Moyer and Baker were rescued by Cryptozoic Entertainment, who agreed to publish the game and provide the backers with the copy of the game they were promised, all out of their own pocket. These guys are the real heroes of this story.

Finally, Justice?

Judging Cat is Judging YouSo the FTC charged Chevalier with the failure to produce any of the rewards for the backers and never issuing any refunds. They fined him $111,793, however,  it has been suspended due to his current financial situation, ahem…he’s broke. He is also permanently barred from raising money through crowdfunding. So…”yea”…I guess.

What do you think about the FTC getting involved and the punishment they levied against Chevalier? Too soft, too harsh, just right? Leave a comment below and let me know.

-Steve P.


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