Indiegogo-backed helmet company declares bankruptcy amid lawsuit

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Mashable | | Aug 10, 2016

Skully failure

So much for smart helmets. 

Skully, the Indiegogo startup that promised a revolutionary augmented reality motorcycle helmet, has gone bankrupt.

The company is filing for Chapter 7 bankruptcy amid reports of serious misuse of company funds.

Skully's founders, brothers Marcus Weller and Mitch Weller, were replaced in July in the wake of customer and investor complaints about the serious lag time between their donation and any visible progress. The company's new CEO Martin Fichter promised in a blog post that the company would ship 400 helmets by the end of July.

The end of Skully comes amid reports of a lawsuit that alleges the Wellers misused company funds, spending investors' money on lavish vacations, several apartments, expensive sports cars and even $2,000 at a strip club.

"Our team is devastated and deeply saddened that our valued partners, vendors, employees and customers have been negatively affected by what has transpired," the company said. "We realize there are many unanswered questions and that this is a very upsetting situation. We are truly sorry."

See: Learning from the Failures: Building Trust in Crowdfunding Campaigns

The 2014 Indiegogo campaign that launched Skully was one of the most successful in the platform's history. Almost 2,000 backers raised $2.4 million for the company to produce the AR-1, the "world's smartest motorcycle helmet." Many of those backers paid at least $1,399 to reserve their own helmet when the product became available.

After that Indiegogo campaign, Skully raised an additional $12.5 million in two rounds of funding, according to Crunchbase.

The helmet was supposed to be equipped with nearly everything a car has, but in a helmet. That included GPS, voice control, a rearview camera, links to phone and music and a host of other features. It was heralded as revolutionary by motorcycle enthusiasts and professionals, tech leaders and publications like Popular Mechanics.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1300+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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