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This is reasonable in general, but the expected narrative for "project fails" is something like "we can't make this" or "we needed more money than expected" or

This is reasonable in general, but the expected narrative for "project fails" is something like "we can't make this" or "we needed more money than expected" or even just "we got bored, screw you". It does feel a bit different when the answer is "we took this as seed funding to go enter a totally different market, suckers!" Or in Jolla's case, "thanks for the money, asshole!" There are plenty of markets with risks to the investors that still have boundaries. If a mutual fund picks badly and loses money, that's an issue for the investors. If a mutual fund turns out to be using your money on personal bets (like the London Whale) or simply stealing the money outright, that's a legal issue.

kogepathic 9y ago
> If a mutual fund turns out to be using your money on personal bets (like the London Whale) or simply stealing the money outright, that's a legal issue. Exactly, there's a difference between failure and fraud. If you're soliciting donations to advance your OS development, then pitch the project as such. If you're promising backers a physical good, and then you decide to pivot, keep the money, and not deliver the backers anything or return their money, then people will obviously feel like you've defrauded them. Unfortunately from a legal perspective, crowd funding backers have little to no legal recourse when businesses decide to use their contributions as an interest free loan for their other business operations.