SAN FRANCISCO (KPIX 5) — A Bay Area startup that aimed to develop the motorcycle helmet of the future may be headed for bankruptcy, despite the capitol they raised from crowdfunding.
It was supposed to be the motorcycle helmet of the future.READ MORE: UPDATE: 1st U.S. Case Of COVID Omicron Variant Confirmed In San Francisco
The augmented reality Skully helmet racked up nearly 2,000 backers on the crowd funding site Indiegogo, contributing nearly $2.5 million for what the promotion video called pre-orders.
The so-called Skully Nation reportedly made it one of the most successful campaigns in the history of Indeigogo.
Skully was on the road to success when KPIX 5’s Don Ford interviewed one of the founders in 2014, but even after an additional $11 million in venture capital funding, the company hit a rough patch.
The company’s founders were recently forced out amid allegations that instead of spending backers’ money on the motorcycle helmet of the future, they spent it on lavishes lifestyle Including strip clubs, exotic vacations, and fancy cars.
The lawsuit, filed by a former bookkeeper alleges the company’s founders – brothers Marcus and Mitchell Weller, routinely demanded fraudulent bookkeeping and used corporate accounts as a personal piggy bank.
It also alleges – company funds paid the rent on their San Francisco apartments, along with weekly apartment cleaning, groceries, and more.READ MORE: Facebook Uncovers Massive Network To Spread COVID Misinformation
I think this was an egregious mismanagement of funds and the people who committed their money early on, they’re out of luck.
Andrew Dix of crowd funding insider says as a result of the alleged financial mismanagement, the company’s new CEO is reportedly planning to file bankruptcy.
Which is bad news for the crowd funders who believed they were pre-ordering the helmet of the future.
The team looked pretty good on paper, it’s hard to decipher who is going to deliver who is not, in this situation it’s really a tough story.
Indiegogo noted that crowdfunding is not an investment – you are making a contribution, not a purchase. Many contributors to Skully believed they were pre-ordering a product.
Before contributing to any crowd funding campaign, Indigogo stresses you should investigate the company to make sure they have the experience and resources to fulfill any promises.MORE NEWS: Trevor Noah To Host 'The 64th Annual GRAMMY Awards' On CBS
The sliver lining for Skully backers is that the smart bike company Fusar has offered a credit to those who paid for Skully pre orders, calling it Skully Owners Stimulus, or SOS.