[skuhn]

They don't have a $33mm Kickstarter obligation to take care of. Their most recent project raised $12.8mm for the Pebble 2, Time 2 and Core. According to this rumor, they intend to refund people who pledged money for the Time 2 and Core.

Doing some quick math, it looks like they plan to refund $9,650,775 (plus any amount people pledged above the minimum threshold for a given pledge tier). Of course they're returning the full value on money they received after Kickstarter's 10% cut. They would have only received about $8,700,000.

[greglindahl]

Thanks, I was making a (bad) guess about what had been successfully delivered. Hm, that makes the reported $40mm price closer to having money falling on common, but probably not close enough. Did the $15mm series A have a 2X liquidation preference?

[skuhn]

Without knowing any details about their business, my guess is that they also have substantial debts with their manufacturing partners.

Since they kept going back to the Kickstarter well, maybe their business never got to the point where the fundamentals made sense -- after all, they were selling a $99 Pebble Core for $69 (actually $62.10) via Kickstarter. That kind of thing really eats into your margin.

Maybe they thought the Kickstarter customer base was just the most enthusiastic 10-20% of customers, and if it turned out to be 90-100% of customers they were left with production costs that didn't work. If you don't hit scale on production, you still get to pay the giant upfront costs.

At any rate, why liquidate the company if they had enough money in the bank to pay the entirety of your debts. A company at that point will hope that there might still be a way out.