Earlier this week, the company behind the hottest semi-failed Kickstarter campaign of 2014, the Coolest, announced that it has settled with the attorney general in its home state of Oregon. Now the details of that settlement are out, and we’ve learned that the worst-case scenario is that backers will each receive $20 if the company fails to deliver.
Earlier this week, we learned that Coolest reached an agreement with the state to ship coolers first to residents of Oregon and to people who filed complaints with the state’s Department of Justice as of April. These backers’ coolers must be shipped by October 13, 2017. We’ve now learned that a total of 873 coolers are in this category. Whether they’re shipped by October will be an important test for Coolest.
If the company is unable to deliver the remaining 20,000 coolers by 2020, it will owe $20 each to remaining backers. That might seem small compared to the original $13.2 million in pledges and the minimum of $185 plus shipping that most backers pledged, but one important stipulation is that even if the company ultimately fails, it can’t get out of this obligation by filing for bankruptcy.
Another important part of the agreement with the state [PDF] is that the company, and presumably also founder Ryan Grepper himself, won’t be allowed to use rewards-based crowdfunding sites until all coolers have shipped.
“Respondents are not prohibited from seeking investors and engaging in (with or without remuneration) educational activities, mentoring, or advising other individuals who are seeking crowdfunding for their own projects,” the agreement notes. Would anyone have backed a campaign that the company ran now at all, unless they were extremely patient and not planning to move for six years?
Back in 2014, Coolest collected more than $13 million in pledges on Kickstarter for a large ice chest with a built-in blender, cutting board, USB charging ports, and a Bluetooth speaker that was supposed to be on backers’ doorsteps in 2015.
Were you a backer of the Coolest? Whether you’re in the 40,000 or so who have received your cooler or the 20,000 or so who haven’t, or you broke down and bought one on Amazon while you were waiting, we’re curious what your experience has been. Drop us a line and/or an invitation to your next beach party at email@example.com.