There has been a long and sorry history of million-dollar Kickstarter campaigns crashing and burning, whether the drone company that failed to deliver a product (over $3 million) or the laser razor that got booted before it could even try (over $4 million).
And now there is another chapter, as an e-ink watch company that once raised over $1 million from Kickstarter backers has declared bankruptcy – and none of those backers are likely to see a cent.
In 2013, a Kickstarter campaign for theCST-01, from the company Central Standard Timing, raised about$1 million from more than 7,600 backers. TheCST-01was billed as the “world’s thinnest watch,” but it never seemed to get off the ground.
The CST-01’s woesstarted with the pressures of that thin ideal, which caused the company to have to hunt for an elusive battery technology that could meet the specs it set forth in the campaign. The company eventually parted ways with its hardware partner, Flextronics, and said it would need $1.2 million more to actually mass produce the watch,according to Popular Mechanics.
That wasn’t going to happen, and the company has now declared the inevitable: It has filed for bankruptcy.
Having a Kickstarter flame out isn’t exactly surprising, but the spectacular scale of this one is impressive.Slashgearfound one document that said Central Standard Timing’s assets totaled just $30,000 ($10,000 of inventory, $10,000 in equipment, and $10,000 in patents). The liabilities were $891,563.
That means it is extremely unlikely that any backers will get their money back,according to Slashgear. Those backers are “unsecured creditors,” and they are last in line.
And the kicker,according to Slashgear, is that the company’s statement includes this gem: “The Trustee/Assignee has not determined whether a Kickstarter or other crowd-funding contributor is entitled to participate in a distribution, if any.” Basically, good luck Kickstarter backers.
This is just another reminder that you should be careful which Kickstarters you back (it’s a donation with a promise attached), thoughas Popular Mechanics’ Eric Limer points out, the company has gotten better since 2013 about sniffing out potential fraudsters. After all, it did kick out the laser razor -which went on to raise$483,711 on Indiegogo.