3D Headphone Startup Shut Its Doors After Raising $3.2 Million in Crowdfunding

[Chino]

In the business world, companies fail all the time, and startups are no exception either. Ossic is the latest startup to make the headlines after announcing over the weekend that the company is shutting its door. The audio startup had successfully raised $3.2 million through Indiegogo and Kickstarter campaigns to produce their high-end "3D sound" Ossic X headphones. The headphones, which costed between $199 to $299, incorporated special head-tracking technology to deliver surround sound in VR environments. Apparently, they were also capable of determining the shape of the user's ears and customize the sound profile to match the user.

Ossic had received over 22,000 pre-orders over the company's life. Unfortunately, the company only managed to produce 250 pairs of their Ossic X headphones and delivered around a dozen of them to Kickstarters. As the well has run dry, Ossic has no other alternative but to cease operations. Kickstarter backers are extremely angry - and with right as they will not receive their headphones or refunds. A Facebook group with over 2,500 members threaten to pursue a class action lawsuit against the company.


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[Slizzo]

Jesus, Kickstarter users still not understanding that Kickstarter programs are not preorders?

 

[Liviu Cojocaru]

Good luck with the class action lawsuit...unfortunately most of them won't get their money back I think if you want to support a kickstarter you have to do it with small amounts to minimise the lose in case smth goes wrong

 

[mcraygsx]

Lets see where STAR CITIZEN takes us at this point.

 

[yotano211]

The world has 22,000 confirmed idiots.

 

[R-T-B]

The world has 22,000 confirmed idiots.

If it was only that many idiots in total, I'd be jumping for joy.

 

[RH92]

Don't know if i should be more concerned about what i read in this article or some of the comments here !

This company managed to collect millions of dollars ( goal was " only " 100k ) and then they disappear instead of delivering the product but some of you find normal to blame the customers ? Are you kidding me guys , what's wrong with you ?

That is called a SCAM and unless Kickstarter has become a scuming platform then this is everything but normal ! Those scumers should be prosecuted not only by the backers but by Kickstarter as well since they are seriously damaging this platforms reputation.

 

[Vayra86]

3D high end sound... Headphones... for audio.

Yeah. If you fall for this nonsense you kinda deserve it. Consider it an expensive lesson learned.

That is called a SCAM and unless Kickstarter has become a scuming platform then this is everything but normal ! Those scumers should be prosecuted not only by the backers but by Kickstarter as well since they are seriously damaging this platforms reputation.

In all fairness no. Kickstarter is a no guarantees endeavour, which is exactly the reason that it can exist. If you lock this down in any way, you also destroy the projects and start ups that ARE real drivers for innovation. The problem is with these buyers who think they are 'investors' - they are not, they toss money at some product they'd love to see. They are NOT stakeholders even though they believe they are. If people want to be deluded they will, you can't stop that.

If they really did run with the cash then the numbers will pop up at some point but right now no one can really tell. Its also just a fact that many startups fail and many ideas die after the initial hype. Regardless, the backers who overspent on something are always mad, and for them, the lesson learned thing applies.

Star Citizen was mentioned in this thread, well, apply the above logic to that project, especially to its 'whales' and surely you can see what I'm getting at

 

[RH92]

In all fairness no. Kickstarter is a no guarantees endeavour, which is exactly the reason that it can exist.

KickStarter policy:

When a project is successfully funded, the creator must complete the project and fulfill each reward !!!

Needless to say more .

 

[Vayra86]

KickStarter policy:

When a project is successfully funded, the creator must complete the project and fulfill each reward !!!

Needless to say more .

Right. And then you get down to the real world where neither Kickstarter nor the backers get serious enough to file a case. 'Policy'... is not law. Its a gentleman's agreement at best.

 

[RH92]

And then you get down to the real world where neither Kickstarter nor the backers get serious enough to file a case.

https://www.facebook.com/groups/932229213618373/

I can't read the future you seem to be able to do so......

 

[Paganstomp]

You will never find a more wretched hive of scum and villainy. We must be cautious.

 

[RollyPalloney]

They should have ICO'd. At the very least, they got over 3 million and didn't know what they hell they were doing and at worst, they outright exit scammed. Either way, that's pretty much what all ICO's are anyway and they would have probably raised 10 times that amount in an ICO.

At some point, the SEC will wake up to the fact that ICO's are unlicensed, unregistered securities and the game will be over, but until then, it seems that even the most rotten garbage is still worth hundreds of millions (looking at your Verge).

So in the off chance that they were not exit scamming and just ran out of money, an ICO would have given them a lot more runway.

 

[erixx]

Welcome to the stupid neoliberal trumpian distopia of "let's all get rich... or poor".

 

[Hood]

The world has 22,000 confirmed idiots.

To me, even if the headphones had been delivered, they're idiots. $300 for crappy plastic "3D sound" headphones from an unknown company? People have too much money, not enough sense. Why do they need "head tracking technology"? Relative to the sound, your head will always be in the same place - right between the ear cups. And custom profiles to "match the shape of your ears"? The people who pre-ordered these really are nimrods, looking for something to make them feel "special". They may deserve what they got, but shame on Ossic for preying on the young and stupid ones, even if their con game is technically legal.

 

[lexluthermiester]

Jesus, Kickstarter users still not understanding that Kickstarter programs are not preorders?

Right. Kickstarter, Indigogo and the like are "at risk" ventures. If you contribute, you risk losing your money. No different that investing in the stock market.

 

[FordGT90Concept]

A Facebook group with over 2,500 members threaten to pursue a class action lawsuit against the company.

They should. It's the only shot they have at least getting a refund.

 

[R-T-B]

Right. Kickstarter, Indigogo and the like are "at risk" ventures. If you contribute, you risk losing your money. No different that investing in the stock market.

While true, this does not completely absolve kickstarter beneficiaries of responsibility to their contributors. Yes, it's risky and yes they are probably screwed. They still have every right to sue.

 

[FordGT90Concept]

Right. Kickstarter, Indigogo and the like are "at risk" ventures. If you contribute, you risk losing your money. No different that investing in the stock market.

Actually it is. Stock market you're purchasing securities (overseen by SEC); Kickstarter you're preordering goods (overseen by FTC). Those owed headsets are debt on their balance sheet. Crowdfunding isn't a carte blanche to defraud the public.

 

[Caring1]

I'm inclined to think those contributors that think they are paying up front for a "pre-order" are idiots.
With Kick starter projects it is risk venture capitol, invested with the potential of realising a product as a reward
if the company succeeds.

 

[lexluthermiester]

Stock market you're purchasing securities

Securities you are at risk of losing all of. It is effectively no different.

Kickstarter you're preordering goods

Incorrect, you are investing in a possible product with no guarantee of delivery. It sucks, that's life.

They still have every right to sue.

Maybe. Even if they win, they'll get pennies on the dollar at best.

 

[FordGT90Concept]

Venture capital involves a stake in the company. Pre-orders don't represent stake.

Maybe. Even if they win, they'll get penny's on the dollar at best.

Depends on how the money was spent. If some employees of the company squandered it on frivolous things, it's fraud. The individuals will be ordered to pay what is owed.

 

[newtekie1]

Depends on how the money was spent. If some employees of the company squandered it on frivolous things, it's fraud. The individuals will be ordered to pay what is owed.

Sure whoever wasted it can be ordered to pay it back, but chances are they can't and never will. The best is the person's assets will be seized and liquidated to help pay it back, but even that only gets you pennies on the dollar. And chances are the money was spent on things that can't be returned. It is pretty hard to get money back that was spent on hookers and blow after all...

 

[R-T-B]

Maybe. Even if they win, they'll get pennies on the dollar at best.

If that. They may end up in the hole with lawyer fees. But they do have the right to try.

 

[95Viper]

WOW!
It was not 3.2 million... it was a total of $5,932,914
Indiegogo = $3,224,442
Kickstarter = $2,708,472
Plus (not included) approx. $100,000 plus at StartEngine

TechTimes : 3D Headphones Start-Up Ossic Shuts Down After Raising Almost $6 Million: New Entry In List Of Crowdfunding Failures
Quote from TechTimes article:

Ossic, the startup that promised high-end pairs of 3D headphones, is shutting down after raising almost $6 million from crowdfunding.

The company is the latest in a growing list of crowdfunding failures, with most backers not receiving anything from Ossic after its closure.

EDIT: They updated the info after I had already posted... It was, only, $3.2 million +
TechTimes has not updated the article there, yet.

Quote from business insider:

A previous version of this story said that Ossic had raised over $5 million from crowdfunding. In fact, it raised $3.2 million in preorders from Kickstarter and Indiegogo combined.