[amirhirsch]

The reason to use crowdfunding platforms like Indiegogo or Kickstarter is because you are not liable to pay people back who give you money for your project. By accepting credit cards directly you forego this release from liability. Not only is there personal liability for damages, there would also be a criminal investigation. Lily Robotics had a similar situation. A warrant had been served to collect information for a criminal investigation, but Lily paid everyone back since they held all the money separately.

It is fraudulent to take payment and not deliver product regardless of the intentions of the founders to be successful. Lacking mens rea, perhaps makes it a misdemeanor instead of felonious, but courts will push the founder all the way to bankruptcy and potentially to jail if they cannot repay damages.

Seems like other comments may not understand what constitutes fraud. I have experience with this situation and discussed it with my lawyer when my company eschewed kickstarter/indiegogo and opted for direct sales instead. We even used our rejection of crowdfunding for PR to boost sales (thanks techcrunch!). Our sales spike was such that PayPal held our money in reserves, which led me to take on all sorts of awful loans to pay for scaling production and made for a slow and painful fulfillment process.