Crowdfunding Failure: Fraud or Incompetence?

After crowdfunding over $120 Million, UK video game developer Cloud Imperium Games has yet to deliver the promised Star Citizen video game.

Is it fraud or just plain incompetence?

A recent informal investigation notes that it’s more likely the latter, as management was inexperienced and had no detailed business plan as to how to accomplish a relatively ambitious project.

Although somewhat jargony for the general public, the report appears to conclude that while money poured in from fanboys/girls, the company tried to go one way and then changed course in mid-stream wasting funds and time.

Many donors have asked for and received refunds, but CIG continues to plug away with no game in sight.
http://www.pcgamer.com/eight-month-investigation-lifts-the-lid-on-star-citizens-troubled-development/

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About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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