Crowdfunding, and how the organiser benefits

The following text is quoted from RMweb where, as it is directed against the admin’s pet manufacturer, it is likely to be sanitised. I believe it should be read as written, not as the admin wants you to see it.

http://www.rmweb.co.uk/community/index.php?/topic/113930-new-n-gauge-crowdfunded-class-92-electric-locomotive-project/?p=2450558

I have also made screen prints of the text, just in case anyone at RMweb decides to say it is all made up and nobody ever criticises DJ Models.

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Good Afternoon Dave Jones,

In the now locked thread you said, “So what do i do? Over to you.”

Well, we can’t answer that one for you but it would appear that you have already made the decision.  In that post you state that you were contacted by another manufacturer after you initially announced the 92.  At the announcement point you were not taking any money from the public for either the N or OO model.  I recall this as I looked around your website when submitting an ‘expression of interest’.

You have since begun to take monies from the public and so one can assume you have taken the decision to press on with the 92 already armed with the knowledge that another manufacturer was intending to produce it also.

You, Hornby, Bachmann or any other manufacturer are all quite entitled to produce whatever models you like (subject to the necessary licensing of course) and that fact remains so there is no reason why you shouldn’t carry on.

Now, whilst I’m posting this I’ll take the opportunity to mention that I will no longer be giving you any of my money, and that my decision has nothing to do with another manufacturer’s plans but simply down to what I personally take to be deplorable behaviour on your part.  Allow me to explain why I feel this way.

Yesterday you posted that you intend on producing 92s for sale to the trade once the ‘crowdfunders’ have received their 92s and that the trade 92s will sell at at higher price.  When you initially announced the 92 project there was no mention of this whatsoever in either the N or OO thread (screenshot attached).  This had given me the impression that the only way to acquire a DJM 92 was to pay upfront for one of a limited run, which I was happy to do.

However, you are now stating that you intend to produce another batch of 92s to the trade.  This is an issue for me because as I see it any monies I give to you for the crowdfunded 92s are simply to bankroll a production of 92s for the trade from which you will profit greatly.

Given the estimated crowdfunded prices of £130 and £150 per loco for N and OO respectively, and given the nature of crowdfunding being a wholly funded entity, the crowdfunding will; pay for the R&D, pay for the CAD work, pay for the tooling, pay for livery licences, pay for the materials and production, and finally supply the models to the ‘crowdfunders’.  Undoubtably you will make a little profit for reinvesment as you or anyone else quite rightly should given the hard work you will put in to such a project!

You will then produce another batch of 92s to the trade after we, the public, will have bankrolled all the R&D, CAD work, the tooling and the livery licenses.  You have already stated the trade models will sell at higher prices, and to differentiate them from the crowdfunded models they will have different running numbers/names. But that it all.

This, therefore, is not a social crowdfunding (community/not-for-profit) project in the traditional sense, but is more a form of equity crowdfunding, though you are not offering the public any equity or return on investment.  You are merely offering to return investments in the form of a model locomotive, leaving you to benefit greatly from a much reduced production cost run of 92s to sell directly to trade with a high(er) RRP.

This is great business for you but a lousy investment for me!

The alternative of course is that DJM is co-funding this project and investing in the R&D, CAD, tooling and licensing as well.  However, if that is the case then you have no grounds to claim that this is a ‘crowdfunded’ project nor advertise it as such.

If this is jointly funded then I am greatly concerned at the estimated costs of the models to funders, let alone what the price to trade and RRP will be and thus how that would affect trade sales.  High I can only assume.

I will assume that the ‘trade selling’ idea is something that has evolved naturally, but for me seeds of doubt now exist over the veracity of the claim ‘crowdfunded model’ in the DJM context.   I’m left with the impression that you have used the spirit and goodwill of a ‘social enterprise’ concept as the basis to fund a commerical enterprise, with no intention of returning any of the profit to the investers that made it happen.  This is something that does not sit well with me.

Your comments on this forum over the past 24 hours or so only agitate my concerns further, as you have given the appearance that as the ‘crowd funds’ are removed the possibility of a trade run of 92s and their associated profits for you slips away.  The notion ‘We fund it, you profit from it’, I find quite distasteful, as do I find using a modelling forum to air dirty laundry in an attempt to manipulate the public into ‘chosing sides’.

Where I am to invest in a business/entity then I need to trust the individuals running it, and now quite simply, I don’t trust you.  Could I please suggest that in future any products intended for trade sale are funded through private equity, business loans etc, and not this way.

I see no reason why a manufacturer should not make a profit for their work on a crowdfunded ‘social enterprise’ project, but using public crowdfunding to bankroll a trade run is simply inexcuseable and risks the reputation and future progress of genuine ‘crowd funded’ social enterprises.

These reasons, therefore, are why I am not prepared to get involved in any initiatives that DJM claim to be ‘crowdfunded’.  And to clarify, it is your actions and words that have led me to making this decision, not those of another party.  As ‘Dragons’ do say, “I’m out!”.

Sincerely,

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So, it would appear that the admin’s best friend is not as universally liked by the rank and file membership as he likes to think he is. Chances are that the author of this post will be vilified by the fanboys and probably banned from the forum. That’s the way things work on RMweb, and has been for many years, so he has my respect for speaking out.

stop board

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About Bob Hughes

Ex railwayman, life long railway modeller, lover of real ale and spicy food. Divorced, three kids, one dog.
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