
How a PR Agency Stole Our Kickstarter Money - iamdeedubs
http://d-cal.com/2017/12/20/how-a-pr-agency-stole-our-kickstarter-money/
======
nimos
I don't know why but it kind of rubs me the wrong way PR agencies for
Kickstarter/crowd-funding even exist. I'd rather back something that had
someone passionate with a shitty cell phone video over the generic sterile PR
videos that everything seems to have now.

[https://twitter.com/Woodshedagency](https://twitter.com/Woodshedagency) The
hashtags on their twitter description almost seem like satire.

~~~
the-dude
This does not work ( passionate developer with a failed KS )

edit : and this was not because the project sucked, the project is profitable
now.

~~~
Xeoncross
2x ditto

------
cr0sh
If I were a backer of the KS, I think I would be pretty po'd to know that my
money didn't go to the people/organization I was backing.

This is definitely something that needs to go to the courts; it has to be a
form of financial fraud, and depending on the amount raised by the KS, it
could end up being a fairly big deal.

As it is, if I were a backer, I would feel like I had been defrauded in some
manner. Even if I got the "prize" (game) in the end, when I back a KS, I don't
do it solely for the item or prize being offered for being a backer, but
because I want to see someone succeed with their ideas and company.

~~~
justboxing
Yes, it's wire fraud if intent can be proven. Relevant to this situation is
'electronic communication'...

> The elements of wire fraud under Section 1343 directly parallel those of the
> mail fraud statute, but require the use of an interstate telephone call or
> electronic communication made in furtherance of the scheme.

> essential elements of wire fraud are:

> (1) a scheme to defraud and

> (2) the use of, or causing the use of, interstate wire communications to
> execute the scheme)

Source: [https://www.justice.gov/usam/criminal-resource-
manual-941-18...](https://www.justice.gov/usam/criminal-resource-
manual-941-18-usc-1343-elements-wire-fraud)

------
cypherpunks01
Nobody has mentioned the irony of the actual game:

"Upstart is a board game that simulates the ups and down [sic] of starting and
sustaining a business."

A 3rd party contractor/service provider stealing your money is certainly one
of the "downs" of running a business.

~~~
jxramos
"Every town, has its ups and downs. Sometimes ups, outnumber the downs, but
not in Nottingham..."
[https://www.youtube.com/watch?v=c2dImprgiB8](https://www.youtube.com/watch?v=c2dImprgiB8)

------
joshuaheard
You violated my number one rule of business: never, ever, give a contractor
your money unless and until they have earned it. I learned this the hard way
as well. I own several rental properties, and I don't let the property
managers collect the rent; I collect it myself (using ViewPost email
invoicing).

You don't explain, but I don't understand why you couldn't open a bank
account. Citizenship is not required. There are online agencies as well, such
as Paypal. Was the problem on Kickstarter's side? It seems to me they would
have provisions for international clients.

I wish you luck, and am glad you are able to warn people. Out of state
lawsuits against out of business corporations (I assume they are out of
business, or are about to be) are difficult to collect, but hiring a lawyer is
a necessary first step.

~~~
earlyriser
I have some experience on this: If you want your KS campaign to be in USD, you
need to have a US bank account and, if I remember, a member of the team living
in USA. Paypal is not a solution on their system. There's a deal between KS &
Stripe's Atlas to let you create a US company and bank account to solve this
issue, but for a gameboard that's going to maybe collect 10K is a lot of
complexity for not enough gains.

------
scaryclam
Looks like Woodshed agency have given their side of the story, and D-Cal are
not exactly an innocent party in all of this:
[https://medium.com/@jeff_52578/how-a-failed-kickstarter-
camp...](https://medium.com/@jeff_52578/how-a-failed-kickstarter-campaign-
told-the-world-half-the-story-and-painted-us-as-crowdfunding-b0582fd11f93)

~~~
sillysaurus3
Wow, thanks for posting this. It looks like the initial skepticism was
warranted.

It was massively dumb to shut off their social media accounts, but I guess
they were just folding under pressure. Smooth recovery.

Also it's remarkable how much power good writing has. Both for ill and for
good.

------
stablemap
[https://twitter.com/Woodshedagency/status/943508162002513923](https://twitter.com/Woodshedagency/status/943508162002513923)

~~~
VectorLock
For a PR agency I'd consider this as officially "going to ground."

~~~
kjrose
Yeah. They’ve gone completely to ground. I am guessing in the hopes it will
blow over before it becomes bigger.

They claimed in a tweet earlier today that they were preparing a response
however the fact they locked off their channel seems to imply their response
is duck and cover.

~~~
stablemap
Thanks for summarizing it—I didn’t anticipate their locking the account.

------
busterarm
This is well into "criminal complaint" territory.

~~~
crb002
More lucrative to go civil; get default treble fraud damages with a 20%
withholding on all their future income that survives bankruptcy because of the
fraud. But then IANAL.

~~~
chii
but going civil requires your own lawyers, while a criminal fraud case is
initiated by the state prosecutor. if you can't afford a lawyer...

------
late2part
There are a few things about this I don’t understand. How much money was it?
Were they supposed to get a percentage of money raised, or did they get paid a
fee and then get a percentage on top? Do I understand correctly that they’re
having money problems so they kept your money to solve their money problems?
The simple way to solve this is to take them to court. Is there anything more
to the story than you trusted them with your money and they kept it?

~~~
sillysaurus3
_How much money was it?_

[https://www.kickstarter.com/projects/rdacalos/upstart-the-
bo...](https://www.kickstarter.com/projects/rdacalos/upstart-the-board-game)

Looks like $35k. No one would risk destroying their reputation over that small
sum. I wonder what the other side of the story is?

Abuse is pretty common in gamedev, but this would be flagrant.

~~~
gamblor956
_Looks like $35k. No one would risk destroying their reputation over that
small sum. I wonder what the other side of the story is?_

People have killed for far less...If they were in a bad enough financial
position, they could have thought that they would borrow their client's money
to pay immediate bills, and pay the account back with future client earnings.
It happens quite frequently in the legal world--it's the number one reason
lawyers get disbarred in CA after drug use.

~~~
panglott
Possibly even a single partner was defrauding the business.

If the other partners were not aware this was occurring until now, that might
be a more benevolent explanation of why the agency has gone dark.

------
dmitrygr
Woodshed replied: [https://medium.com/@jeff_52578/how-a-failed-kickstarter-
camp...](https://medium.com/@jeff_52578/how-a-failed-kickstarter-campaign-
told-the-world-half-the-story-and-painted-us-as-crowdfunding-6fd0adf91c45)

~~~
figgis
"The author deleted this Medium story"

~~~
dmitrygr
EDIT: i made a copy:
[https://drive.google.com/open?id=1s3ymjWo7lQJxsrf0uDEurJZ3FB...](https://drive.google.com/open?id=1s3ymjWo7lQJxsrf0uDEurJZ3FBeLKkzH)

original post:

The summary as stated (and as i understood it) is as follows. I take no sides
here, just trying to summarize the post since i managed to see it before it
went bye-bye

> campaign did not succeed as promised, owners allegedly propped it up with
> own money from fraudulent credit cards that never cleared

> kickstarter paid woodshed $16K (the amount that did clear)

> depending on fee counting, woodshed owed 10% of that, plus 4K they spent on
> promoting the game

> their accountant told them that they are on hook if game isnt delivered
> since they have the money so they waited till game delivered

> their accountant told them they are on hook for taxes since they are in USA
> and got the money and they don’t know what to do now

> "words we said. allegations made. reputations ruined. it is in the hands of
> lawyers now"

~~~
valuearb
I don't understand the tax concerns. They got $16k, they were owed $3-5K, they
would have sent the rest to the owners, only what they kept needs to be
reported as income for tax purposes.

The rest makes sense and I regret jumping to conclusions (though a quick tweet
from Woodshed saying the story was inaccurate and they had a response coming
without blocking people would have made it easier to trust them).

If it's true as told by Woodshed, if them I'd just refund the $16k to the
backers, and wash my hands of it.

------
LaundroMat
I can imagine one scenario where Woodshed was in dire financial straits and
calculated that the brand damage resulting from keeping the game developer's
money was worth it.

~~~
matte_black
I can imagine another scenario where they secretly converted all the money to
Bitcoin thinking they could skim a profit from the rising prices and then pay
back the client in USD, but now Bitcoin isn't liquid enough and they can't get
their money out so they are stuck.

------
soared
I don't buy this story. The entire post is one sided - am I really supposed to
believe some pr agency straight up stole your money? And now 7 months later
you are "doing what we can on a legal front"?

This is a perfect example of why we should all follow the "innocent until
proven guilty" idea. There is no proof, no chance for the agency to refute
claims, etc.

Convenient that they are also asking for more financing.

~~~
valuearb
The culprits have chosen to block people who ask them about it on twitter, and
so far haven't told "their side".

~~~
kjrose
I have a feeling this may be a crossed wires problem where someone spent the
money raised before they sent it because of bad accounting or whatever.

Regardless, if the statement “we received none of the money” is true. There is
definitely something bad going on here.

~~~
kbenson
If it's been 7 months, that should be plenty of time to replace the money. If
the money was too much to replace in that period of time, I'm not sure how I
can believe it was of an amount that could be accidentally spent in this way.

If I had an extra $1,000 in my account, I might accidentally spend it, but I
could replace it eventually. If I had an extra $50,000 in my account, that
would be much harder to replace, but I'm not sure how I could with a straight
face say I spent it _accidentally_.

~~~
user15672
Looks like replacing the money isn't the issue, it's whether or not D-Cal have
screwed over the agency. Over half of the KS pledges were made fraudulently by
D-Cal themselves, meaning the money doesn't actually exist and their campaign
was a failure. This puts the agency on the hook for any and all refunds if the
people who actually put their money into pledges ask for a refund (the agency
account is tied to the campaign now). D-Cal have apparently not come up with a
proper solution to repay the money if this happens, so Woodshed are not happy
about releasing the funds until this is resolved (on their accountants
advice). I'd suggest that all D-Cal have to do is finish setting up an account
that can be used on KS and the account could be switched and funds deposited.
Either that or put enough cash to cover the agencies costs into some sort of
escrow.

([https://medium.com/@jeff_52578/how-a-failed-kickstarter-
camp...](https://medium.com/@jeff_52578/how-a-failed-kickstarter-campaign-
told-the-world-half-the-story-and-painted-us-as-crowdfunding-b0582fd11f93))

------
devdad
I really don't understand the mentality that you should act as your opponent
is a decent person while at the same time claim that they're spreading lies.
If someone would act like this against me, I would try to crush them in court.
I'd never act as I like them. Is this an American cultural thing? Or maybe a
crowdfunding thing?

If Woodshed are to be believed, D-Cal has basically tried to crush their
reputation. They did the right thing not responding to tweets.

------
DoreenMichele
As others are noting, it is one side of the story and very blamey. I think
this could have been written differently and been on very solid ground instead
of the smear campaign it is. A better framing might be:

Lessons learned:

1\. If you are not US-based, be aware that there are extra challenges wrt
actually getting your money and it may take additional time to handle that
piece, so don't delay setting that up and thereby get yourself inti a
scheduling mess like we did, which is what led to this decision.

2\. Be aware that a favor of this sort from a non bank business is risky. All
kinds of things can go wrong.

3\. If you can't get your ducks in a row to make this work properly, it may be
a de fecto waste of time. We still haven't gotten our money, but made it work
anyway. I would have had more time and energy for side projects etc had I not
been wasting my time on this debacle.

4\. Woodshed told us they are "reorganizing," which sounds like our money is
being used as a free bridge loan. If so, that's an abuse of our naive trust.
It also does not look good that they have largely stopped communicating with
us. However, I still hope they do the right thing and get our money to us.

\--

Of course, if they had that level of diplomatic skill in house, they might not
feel they need a PR company. So, it sort of isn't shocking that they don't
really know how to do this well, all things considered. The diplomancers they
thought they hired to help craft their public communications are the very
people with whom they have a conflict.

I will add that part of the reason to handle it this way is to cover your own
butt, not to be "nice" to people who are probably assholes, by the sound of
it.

------
tjpaudio
I find it absolutely amazing that they would let someone else handle the money
that represents the life of their business. Hard to feel sorry for them. No
doubt the correct thing to do would have been to delay the campaign until the
banking issues were resolved. This was an amateur mistake. Yea it would be
nice if we lived in a world where we could be naive and let strangers handle
our money without fear but we all know thats just not the case and not prudent
even if it was. I don't feel sorry for this project, lesson learned they won't
make the same mistake again.

~~~
ineedasername
I don't think blaming the victim is a useful criticism. Trusting a vendor to
perform the tasks for which they've been hired is hardly a fault. Woodshed
represented this as a service they had offered clients in the past, and the
client had a contractual addendum. In the world or raising money, it is
extremely common, even required at times, for a fundraising partner to control
some or all aspects of the financial arrangement. Indeed, many times it is
this logistical coverage that is a primary service sought by the client. You
protect yourself by having the appropriate contractual agreements in place,
which the client did here. That is the way modern business works: Not without
trust, else all business would be impossible. But with limited trust, and
recourse to a legal system when the trust is betrayed. Again, this is the path
taken by the client.

~~~
slantyyz
>> You protect yourself by having the appropriate contractual agreements in
place, which the client did here.

I disagree. You protect yourself by doing your necessary homework _before_ you
even sign the contracts.

Contracts are helpful, but in the real world, getting a resolution can be very
messy. Lawsuits are stressful, expensive and time consuming. If you've been
through a lawsuit, you'll know that being right is often very small
consolation, especially if your adversary happens to have better legal
representation than you.

~~~
ineedasername
And in that hypothetical reality no one ever needs recourse to a legal system
for contractual disputes. I've been through lawsuits, specifically for
fraudulent representations made by a vendor. (We won, easily. Good record
keeping and contracts saved the day) In that example and this one, it doesnt
appear that additional research on the vendor would have revealed a show
stopping issue ahead of time. Of course the victim could have avoided the
issue with either perfect foreknowledge or private investigators rifling
through a small business's financials. In the real world though, due diligence
follows practicality, and uses best effort up front and contracts and lawyers
just in case. Your interpretation belies the viewpoint of "someone was able to
attack them therefore its their fault they got attacked"

~~~
slantyyz
>> And in that hypothetical reality no one ever needs recourse to a legal
system for contractual disputes

I'm not saying that. But in practice, the legal system favors those who can
afford the time and money to go through the process. That's why a lot of cases
are settled instead of going to trial. If the case isn't particularly clear
cut, it's an expensive proposition for the individual or small business,
especially if you can't find a lawyer who thinks your case is worth his/her
while.

>> I've been through lawsuits

You or your company? Did you pay any of the legal fees out of your own pocket?

For this specific case, we're talking about $35K being a significant chunk of
money for the OP. He had to close two bank accounts because they "hit negative
balance".

How much do you think they can afford to spend to fight this case before it
becomes a money pit? A good lawyer requires an up-front retainer, and is
easily 150/hr, those billable hours add up very quickly.

Sure the contracts might be enforceable, but he's probably going to have to
borrow money to even have a chance to squeeze money out of the PR company.

You might not need to go as far as hiring a PI, but some common sense would
have gone a long way. Letting someone with whom you don't have a longstanding
relationship hold your money for you is generally a bad idea. I have to wonder
if they even checked with the PR company's "Australian client" to see if they
were legit about doing wire transfers.

------
keypusher
If only there was some way to send and receive money, using the internet, that
didn't rely on banks.

------
georgestephanis
Sounds like someone needs to get a

(•_•)

( •_•)>⌐■-■

(⌐■_■)

trip to the woodshed.

~~~
sctb
Please don't do this here.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
georgestephanis
It was the perfect pun!

------
the-dude
What I feel is lacking from this postmortem is looking inwards : did you make
mistakes and how did it affect the outcome.

Answer : we made a huge mistake to trust people with all our money. This
mistake has led to all our problems.

I know it sounds obvious, but still.

~~~
Tyrek
It seems like it's even worse - "we were too lazy to jump through additional
hoops to open a bank account in the proper jurisdiction and instead relied on
a business partner to handle it for us"

~~~
valuearb
Their explanation was their marketing was already starting, they didn't have
time to resolve the bank account issues.

~~~
the-dude
In other words : we have our priorities all fucked up.

They should have postponed until they had their financial infra in place.

~~~
valuearb
You can’t always postpone marketing commitments. Sometimes ads, articles,
events, etc are already commuted and it’s too late to pull out.

I’m giving them the benefit of doubt. A small group of entrepreneurs working
fast to launch a project occasionally misses how long a critical piece will
take before the launch is already conmitted.

