Peachy Printer Collapses After Embezzlement of $320K Kickstarter Funds to Build Co-Founder’s New House
When the Peachy Printer was launched on Kickstarter back in September 2013 it seemed almost too good to be true. Creator Rylan Grayston had designed and created a working prototype of a stereolithography 3D printer that would only cost $100. But unlike a lot of the many, many crowdfunded 3D printers that sounded fishy, the Peachy Printer actually worked, and had a remarkably clever design that was just as innovative as it was inexpensive. While Grayston and his business partner David Boe were initially only seeking about $50,000 to fund its continued development, the campaign eventually netted over $650,000, at the time making it one of the most successful 3D printer Kickstarter campaigns ever.
Once the campaign ended, Grayston said that he would begin development on a production version of the Peachy Printer right away, and at first his updates came regularly and showed significant progress. But eventually the updates started to come at a trickle, and time marched on. While Grayston was still publicly very optimistic about the eventual release of the Peachy Printer, many of the backers started to be concerned for the future of the project. However Grayston seemed like a nice, personable guy, and he had deep roots in his local maker community, so no one ever really questioned him about the ongoing delays. Unfortunately, it turns out that behind the scenes the only thing that the Peachy Printer was able to make was a brand new house for co-owner Boe.
In a shocking update on Kickstarter today, as well as recently released two videos, Grayston finally came clean about his partner’s embezzlement of more than $320,000 of the Kickstarter funds. The problem, as seems typical with almost all of the successfully funded campaigns that end up collapsing, was an astonishing lack of, well, common sense. Rather than setting up a business bank account, all of the Kickstarter funds — $587,435.73 worth — were sent directly to Boe’s personal bank account. When the corporate business bank account had finally been opened Boe immediately transferred $200,000 over to it, leaving the remaining funds in his own accounts. Unfortunately, at the time Boe was in the process of building a new home, and decided to start dipping into Peachy Printer funds to help complete it.
“I ran a campaign in Canada for The Peachy Printer – a 3D printer project that raised over half a million in just 30 days – but now I’m in a very tough position. My business partner and the Financial Manager of Peachy Printer, David Boe, has stolen a large portion of the crowd sourced money. Crowdfunding empowered me, and now crime has brought me to a halt. My backers are mad, and so am I. When I talk to the police about this, I have to explain what crowd funding is, and how I think this problem should be approached. This is very understandable because crowdfunding is so new to Canada,” Grayston wrote in an open letter on the Peachy Printer website.
Within a month of the Kickstarter funds being transferred to him, Boe had spent more than $165,000 on his new home; within three months almost all of it was gone. According to statements made by Boe, the intention was always to pay the money back as soon as he started receiving mortgage funds from his bank. Throughout 2014, Grayston claims that he repeatedly asked Boe to transfer the remainder of the Kickstarter funds into the corporate account only to have Boe respond with excuses for being unable to do so. But as the business funds started to dry up, Grayston said that he became more insistent, and when Boe was only able to transfer $30,000, he said that he finally knew that something was wrong. It would take another month before Grayston was able to get Boe to admit what he had done.
Grayston immediately removed Boe from all company accounts, accepted his resignation and after discussing the issue with lawyers redistributed Boe’s shares back into the company. In an effort to complete the project, the pair made a deal to continue with Boe’s plan of paying back the money when his mortgage funding was released. Grayston said that he agreed to not tell backers provided the repayments were made. In the meantime, he pursued additional funding, including a $50,000 personal loan from a family member and some grant money from the Canadian government. Over the next few months Boe paid back about $100,000 of what he owed Peachy Printer; however his last repayment was on March 2, 2015.
At this point relations between the two former friends and business partners became strained, and Peachy Printer has gone completely broke. The last ditch plan for the company was to start selling retail units of the Peachy Printer before backers were able to get theirs, a wholly unpopular action that was certain to upset the campaign’s backers. According to Grayston, the plan was to sell retail units and begin sending out backer units as the money from the retail units started to come in. Sadly, the process of certifying the laser in the Peachy Printer cost more, and was taking longer, than anticipated, which resulted in the company going completely into the red. With no options available to him, Grayston finally came clean in a pair of, frankly, rather bizarre videos.
The first video consists of Grayston explaining the chain of events, and showing a taped video of Boe admitting to the embezzling that he made as part of his agreement to repay the Kickstarter funds and avoid involving the police. The video is kind of uncomfortable to watch, especially watching Boe squirm on camera, but it begins to turn surreal as Grayston includes some elaborately animated charts and the melodramatic musical score (yes, it has background music) starts to kick in. It is a really strange video:
The second video shows Grayston inviting three of his local Kickstarter backers to the Peachy House, where the printer was being developed, to give them the bad news. The backers were presumably not told before the cameras began rolling, which seems like more of a reality show than real life. I don’t even know how to describe how awkward the eleven-minute video is, it just needs to be seen for yourself:
So here we are, yet another 3D printing Kickstarter collapses due to human failure and absurdly poor planning. How Kickstarter doesn’t have a prerequisite of potential crowdfunders at the very minimum having an independent business bank account before any funding is disbursed is beyond me. But what makes this truly tragic is the fact that by all accounts the Peachy Printer actually works and would have done what it said it would do. Not only had the technology been dramatically improved since the initial prototype was created by Grayston, which would have made his backers happy, but it also looks like it could have been an incredibly successful retail product.
It’s easy, I suppose, to absolve Grayston of most of the wrongdoing here and place it all at Boe’s feet. Part of the success of the campaign was due to Grayston’s passion for the project and the fact that he just comes off as a genuinely nice guy. But while Boe clearly deserves the lion’s share of the blame, Grayston was incredibly irresponsible from almost the beginning. And at this point, despite his claims of having consulted a lawyer, I find it hard to believe that by not reporting the embezzlement for nearly a year Grayston isn’t in some way partially guilty of the same laws broken by Boe. The strange videos, that seem to bend over backwards to absolve him of any crimes, don’t really make it seem as if he’s entirely on the up and up either, if i’m being honest.
For what it is worth, Grayston has pledged to continue to do whatever he can to complete the Peachy Printer and fulfill the rewards for his backers. Short of Boe coming through with the final repayments, which seems unlikely, or securing some outside funding to continue the work, which seems even more unlikely, I’m not exactly sure how exactly Grayston would be able to deliver. It looks like, once again, Kickstarter backers are going to be let down, and out the money that they paid for a product. But considering Boe’s new home, with two fireplaces, was built using Peachy Printer’s money, maybe everyone could work out a timeshare deal to pay off the outstanding debt. The house sounds pretty nice, so maybe if you find yourself up in Canada look it up and get a good look at what you paid for.
You can read Grayston’s entire message on Kickstarter here. And you can read the entire timeline of events, see all of the original documents and evidence of the embezzlement on an Executive Summary that Grayston posted over on Peachy Printer here. And if you would like to file a complaint with the Saskatoon Police Department, you can find out how here.
Do you find this story to be a bit of a shock? Discuss in the Peachy Printer Kickstarter Funds Embezzled forum over at 3DPB.com.
You May Also Like
Stratasys & DSM Venturing Lead $12 Million Round in Support of Inkbit
Stratasys and DSM Venturing (venture capital arm of Royal DSM) lead the way in yet more financing for startups, acting as the major sources of funding support of $12 million total,...
Desktop Metal Reports Total Investments Up to $277 Million Following Close of $65M Funding Round Led by Ford Motor Company
Metal 3D printing leader Desktop Metal, based out of Burlington, Massachusetts, first drew headlines back in 2015. The company was raking in millions of dollars in investments from some big-name companies,...
OxSyBio Raises £10 Million in Series A Financing for 3D Bioprinting Platform to Solve Donor Organ Shortage
In the field of 3D bioprinting, the major, overarching goal is to be able to fabricate functional 3D printed human organs. Many bioprinting companies, such as Organovo and Aether, are making...
Create it REAL Closes Successful €1.3M Investment Round, Focuses on 3D Printing Speed and Security
Danish R&D company Create it REAL specializes in additive manufacturing, and uses its unique development platform to create 3D printers on-demand for companies interested in disrupting and driving their industries...
View our broad assortment of in house and third party products.