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The Flying Lily Camera Drone is Dead, Buyers Will Be Refunded (mashable.com)
The Lily Camera drone, which could begin recording as soon as you threw it into the air and would follow your movements automatically, has failed to materialize. The startup, which took pre-orders worth more than $34 million for its drone camera said Thursday they are shutting down the company and will issue refunds. From a report: The Lily company faced "many ups and downs" last year, the company said, adding that they couldn't secure financing for manufacturing and shipping the first batch of units. The Lily cameras were originally started to begin shipping in February 2016, but the co-founders said "software issues" resulted in a delay in the shipment. Later in October, the team gave people another chance to purchase the device, adding that stores will re-open in 2017. As of last month, the company hadn't shipped a single unit.
Despite them not succeeding, you have to give them credit for at least refunding folks compared to other epic failures on Kickstarter. In the last year, we've also seen the number of consumer drones skyrocket leading to more "accidents" so maybe the market is starting to saturate.
This is why, in my opinion, Kickstarter, et al., should be investment based (i.e. shares). At least then you could write off losses due to failure on your tax return. What they could do is issue you shares and then provide an option to turn in those shares for the product when it ships or keep them in case the company succeeds. Of course, doing it this way would incur all kinds of legal costs, force them to make the books public, and complicate things. Which is probably why they don't do it.
IIRC there are legal limits on when you take that money out of (what is essentially) escrow. That is, the $34 million wasn't actually in their pocket and they (legally) couldn't put it in their pocket until they had a product to ship. That's one of the reasons why Kickstarter brands products to be delivered in the future as 'rewards' rather than 'pre-orders'. (Which doesn't stop people from seeing or using those rewards as pre-orders though.)