E-scooter company goes bust after spending big on Facebook ads

It is, however, very unlikely that anyone ever gets their money back.

It would indeed be difficult to prove this was deceptive and not just really poor, even idiotic, business planning.

So, sure, sue away it is just even more money lost and likely still no scooter or refund to show for it.

If the bar for fraud was set that low, I bet half of failed startups would be considered "fraudulent." More than half if you look at restaurants.

> Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage.

Unless you have some damning email or other disclosure you'd never be able to prove that they knowingly sold scooters they never intended to fulfil, therefore fraud is out. In fact all the evidence seems to indicate the opposite, that their long term goal was to make this a successful business and grow until the money ran out.

It is fraudulent to take payment and not deliver product regardless of the intentions of the founders to be successful. Lacking mens rea, perhaps makes it a misdemeanor instead of felonious, but courts will push the founder all the way to bankruptcy and potentially to jail if they cannot repay damages.

Seems like other comments may not understand what constitutes fraud. I have experience with this situation and discussed it with my lawyer when my company eschewed kickstarter/indiegogo and opted for direct sales instead. We even used our rejection of crowdfunding for PR to boost sales (thanks techcrunch!). Our sales spike was such that PayPal held our money in reserves, which led me to take on all sorts of awful loans to pay for scaling production and made for a slow and painful fulfillment process.

Even though you are trying to warn people, you've accidentally fallen into Kickstarter's "dark pattern in broad daylight" by using the word "preordering."

Kickstarter donations (I consider it a charity) are not pre-orders. If I preorder a book on Amazon and it is late, tough for me. If the publisher closes down, Amazon gives me my money back.

Kickstarter donations, on the other hand, don't even have that recourse. We're giving them money out of the goodness of our hearts, and if everything works out for them and they feel like giving us our reward, we receive a nice "thank you gift."

Kickstarter transactions are charitable donations. We don't get a tax receipt, but if things line up, we do get a reward. If we think of it as charity without the tax benefits, we won't go wrong.

But the moment words like "preorder" or "purchase" enter into the conversation, we've fallen into the trap of thinking that we're consumers purchasing a good or service.

Informed consumers

I've backed a dozen or so, and I've got about a 50% hit rate of anything coming through. The failures are always interesting. Trying to guess, ahead of time, which ones are failures (or scams) - is an education into itself. They always seem so earnest in the beginning.

But, yeah - go into kickstarters with your eyes open. Particularly with people who don't have a track record of deliverying - that, in my mind, is the best signal around. If they've come through more then 3 or 4 times in the past, that's a good indication they may come through on this one.

This is a bit nebulous. Every consumer, especially where the expense is a lot of money for them would do well to give this idea more thought.

A pretty website, a few employees and some prototypes doesn’t hit a meaningful bar, let alone millions of dollars in capital (which this joint didn’t even have), TBH. Too bad fuckedcompany is no longer around, it did a great service.

Unless the whole plan was to sell preorders and feigning failure in order to take the funds. But that's a serious claim and it could be grounds for an investigation if law enforcement was pressured. But it would take more than complaining about FB ads.

It used to be they were a cool way to get access to products that were otherwise unavailable.

1. I got some amazing desserts from around the world that no way would have been able to try otherwise 2. Limited production run clothing using experimental materials 3. Stick on Cell phone microscope lens! The ones I got were before they became a common thing, and they were a small batch production run 4. Board games that are only ever sold through kickstarter.

Now days kickstarter is a lot less fun, it used to be I could go browse local projects and find a ton of local creators to support, lots of kids out of school trying to make their first video game, local board game designer wanting to release his/her dream, that sort of thing. Now days I find a lot less of those quirky fun projects, which is sad.

I never expected anything to arrive on time (software!) and it is pretty easy to spot a hardware project that is going to fail, e.g. if the amount of $ a team wants to raise to make a smartwatch is less than a single run of tooling to make a smartwatch, it is obvious the team doesn't know much about manufacturing! (Though now days outside investors are pulled in after a successful Kickstarter demonstrates interest).

I also got one of those cool track-belts before they became easily available in the US, and I got this obscenely overpowered LED light bulb that I can't actually use anywhere because it is too bright!

Still sad I never got my glow in the dark plants though, that project is what first got signed up for Kickstarter.

Organizations spending millions aren't going to leave a big opening in another medium that's able to reach the same consumers.

As much as blaming is wrong, I do believe in personal responsibility as well. I do not agree with the broad brush that's being used widely around victim blaming being 100% bad. I think it is a spectrum and in this case it definitely tilts towards the buyer.

And no - pre-order from this site is not the same as PS4 pre order. There is a huge difference between a big company that has something to lose and will stand behind its product Vs a random company that goes bust after a facebook spend - that's what makes it a gamble.