DSTLD IPO shows crowd funding does not work for individual investors

A few years ago I had discovered crowd funding, individual investors could get access into early stage companies. Some of them would perish, some would grow slowly and some would IPO. The strategy was to sprinkle your investments so overall you may come ahead.

This year finally something miraculous happened, one of the companies that I had invested in IPO’ed. DSTLD or Digital Brands Group finally IPO’ed. To call the whole thing a shitshow would be an understatement. The reddit thread here captures most of the new action but I will try to summarize my understanding of the situation, why investors lost out and what changes I am making to my portfolio. Spoiler alert: I made no money (atleast for now)


The company Digital Brand Group used incentives to drive up individual investors investing in their company(offering store credit in exchange for investment). I infact invested twice in the company, once via SeedInvest and once via Startengine. Apart from those two platforms, from the thread it seems apparent that the company also did a convertible note via a site called WeFunder which I have never used (Thank God).

A few things happened with the IPO. The IPO seems to have completed earlier this month but most crowdfunding investors don’t even have access to their shares. Not that it matters, the company although has increased its value has reverse split the stock making a loss for each one of its individual investors. I don’t have access to my stocks yet(cue shitshow, however the CEO Hil Davis made a mockery of the early investors by sending an email as late as November with the following quote(I got this letter from reddit, but multiple sources have confirmed this is true):

“In Closing The original founders, Corey Epstein and Mark Lynn launched the first Reg A+ because they believed that the individual investor should make money early on in great companies, not just the Private Equity and Venture Capitalist firms. This offer shows everyone how much we continue to believe in this direction.”

It is super ironical because each individual early investor stands to lose money at this time if they liquidate. There is no guarantee on when(and if) they will make money. Its possible in the future one may be able to turn a profit, however at this time the company has been caught vastly unaware and no individual crowdfunding investor has access to the stock they had bought. The platforms of Startengine, WeFunder and SeedInvest are all blaming the company and the company blames them. The loser is the investor who trusted their money to this company. As of writing this post none of the three platforms seem to have gotten their shit together and Vstock which is supposed to handle the transfer of stock has not responded to my emails.

My future investments in crowd funding

Overall I have invested in over a half a dozen pre-IPO companies via crowd funding. Another shitshow is Trubrain in which I had invested also via Startengine. The company is now doing another round of crowdfunding more than a year later at the same valuation. While claiming the company is doing great, they basically told every investor who had invested early that their money has gained no value. The company is defending against criticism in their latest offering. I think the criticism is fair and the company has just showed a good old fashioned middle finger to its investors.

Similarly, most other investments via StartEngine have been shitshows. Startengine also invests in the companies themselves but post closing of investments provide zero support to companies and/or investors. Another company I had invested in ‘Glow Beverages’ struggled to get terms of its convertible note updated via startengine. The CEO of the company told me he had no luck escalating to StartEngine’s CEO for help. Eventually they had to circumvent start engine to modify their note.

My experience with start engine support has been equally bad. The support is mostly useless and responds with irrelevant things when asked questions about investments.

Between Kickfurther(don’t touch with a 20000ft pole) and Startengine type crowdfunding campaigns i have lost money almost everywhere, the only diamond in the rough for me has been TerraCycle which increased its dividend this year and seems to be a pretty solid company. I feel like that is one company that may end up helping me break even or even come out ahead. I also made some money in TelaDoc which was from a platform that eventually shut down.

My future investments however will never touch Kickfurther or Startengine and I would recommend you to do the same. As is clear from the post, I am invested in a number of companies via these platforms. For the time being, I am exploring complaining to SEC and FINRA for the shitshow that has ensued. While institutional investors are able to sell the stock, investors like me are struggling to get custody of our investments.

Wisetechie reviews the $20 Kangaroo Security Doorbell

First things first, like all content on this site, this is not a paid review. I am not going to go gaga over the product because Kangaroo is paying me money or promoting me on their site. A number of so called news sites seem to be motivated by promises of free products. I paid for this one with my own pocket so rest assured this is a 100% genuine review. Even if someone gets a review unit, you can see if they routinely review free stuff or do they put their skin in the game.

Kangaroo Security

Incase you are unaware, Kangaroo security is the new kid on the block looking to disrupt the DIY home security space(think Simplisafe/Ring). Their devices are cheap, connect onto their Kangaroo network of devices and are backed by pretty spiffy chat support in my experience. They were also doing some crowdfunding campaigns and giving free units to their investors.

I live in a low crime area but even the Wisetechie couldn’t resist one of the deals and got onto the Kangaroo bandwagon. Their security system is already installed in my house, so when they came out with the $20 doorbell, it was a no brainer. I was already thinking of ordering the Ring doorbell for 5 times that price so I figured I didn’t have a lot to lose.

Appearance and Build Quality

The Kangaroo doorbell is mostly plastic and uses 2 AA batteries. Its impressive how this unit is able to run on just 2 AA batteries so there is definitely some decent engineering going on there. I had pre-ordered my unit so i got mine pretty early, however the 1st unit I got was a brick. Womp womp!

Support was really helpful as always and put in an order for another unit for me after trying to fix the brick device. Its been my Kangaroo journey, things just brick randomly but support ships a replacement almost as fast as things go wrong.

Due to the bricking incident, I would say the build quality is probably average. However who really cares about build quality right? This is a camera doorbell so lets see how it functions as a camera doorbell. 

Doorbell Pairing and Performance

Once I got the replacement (around a week later), pairing that unit and adding it to my Kangaroo family of products was a breeze with the app. It took around 30 seconds and the app takes you through the technicalities or pairing the device. It gives you best practices on placement and helps you test out the device. 

Now coming to the most important aspect of the device, the performance of the doorbell. There is a pretty noticeable delay between the bell being pressed and the siren unit chiming. Almost 5-6 seconds. This is very unlike any doorbell I have ever used. Kangaroo is gonna give me a Chime unit as well so we will see if that improves things but its pretty annoying to not hear the doorbell for so long.

The app is also super buggy, many times the bell would ring but the app would hang and not show the photo montage of the person at the door. In the below example, I waited for a good minute but the app didnt recover even after quitting and re-opening. Obviously not gonna wait for a minute before opening the door.

Video and Photo Capture

I think the proof of the pudding is in eating it so I will share a few photos here. I found the quality of the photos in the Kangaroo doorbell almost useless for any real purpose. The faces are impossible to recognize in day or night. Most often the doorbell just misses a delivery person or a visitor. It takes a few photos and stitches them together but i guess the delay is not calibrated to the camera. Since I live in an apartment that faces the street, all my images are terribly back-lit. In the below images it failed to capture my postman and an amazon delivery person either due to backlitness or the sensor firing off with a delay.








On a lighter note(get it, lighter note :D), the only thing the app is good at capturing is the garbage truck.

Verdict

At $20 its not terrible, however I would be reasonably surprised if this ever catches a porch pirate. Its probably a better deterrent than a good tool to capture photos visitors. I have a $65 camera at my front door which does a 100x better job at capturing visitors but i like having this doorbell as a cheap deterrent. The fact that it just works with my current home security is a plus.
garbage truck
Delivery Person missed
Kangaroo Capture
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