WE ARE ALSO GOING TO BURN YOUR HOUSE AND KILL YOUR DOG!
Ofcours it is known to everyone in the industry, the big guys from Lilly who secured $34 Million investment since they started almost 3 years ago.
These guys were honest, they had their own struggles and tried to raise more funds to go for production, Nevertheless i can’t seem to understand how come they couldn't build the technology with all that money they had?
Anyway, they couldn't build it and they were brave enough to admit it and say to public that they will refund their money, BUT apparently that wasn't enough for some people, as reported by TechCrunch; San Francisco’s District Attorney filed a lawsuit today accusing the company of false advertising and unfair business practices. its like seriously? What you are doing? is this the whole thing of crowdfunding to motivate new technologies coming to the market? are we encouraging growth or going to through all failed hardware products on crowdfunding to jail? even if they refund their clients we still send them to jail? WT* is that?
this means from now on, any hardware startup who raise funds on crowdfunding then failed to deliver or even refund his clients might face law suite? this is total BS, this is going to change things if the public or prosecution accepted that or acted on it, if that happens then Lilly might be a case that should be tough in entrepreneurship schools for long time.
It doesn't even end there, the attorney follows; Part of the suit has to do with the initial pitch video, watched by millions of people, showing off what appeared to be a Lily drone following users and shooting video. The drone responsible for all that fancy aerial work and video was not in fact a Lily, but a DJI Inspire, something the creators failed to mention.
This is crazy, Lilly was an innovative product that didn't exist at the time of launching their campaign and that’s the whole idea behind crowdfunding, people understands the risks but still they believe enough in the product so they fund it.
The attorney also said; But at some point, you cross over from aspirational to fraudulent, and the DA’s suit alleges that Lily’s video is demonstrably the latter. — — My question is, who the hell is going to decide if its aspirational or fraudulent, based on what grounds, laws or anything?
Reporter follows by a very very interesting line here:
There’s also a slightly technical issue that forms a second front in the DA’s lawsuit: the fact that they went with an independent “pre-order” strategy rather than an established crowdfunded development site like Kickstarter. That makes Lily’s money qualify more on the side of internet sales than investment in an idea (something Kickstarter and its projects are always careful to explain), which exposed the company to certain consumer protection laws. — — — Well now that makes some sense, it was never a crowdfunding.. then why the hell you call it crowdfunding?
Well, button line is Lily has promised to return the money, and we’ll see how that goes, but if the DA prevails, the company will also have to pay civil penalties: $2,500 for each of the violations described above. Depending on how the judge interprets things and how the lawyers state their cases, that could amount to either a lot of money or a hell of a lot of money. Worst-case scenario is around $300 million in penalties, though of course Lily doesn’t have anything like that laying around.
Sad, but a lot of lessons learned.