> 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. Exact

> 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.