When we launched our first campaign on Kickstarter in 2015 our entire team suddenly found our inboxes filled with unsolicited offers for services. These ranged from e-mail lists to public relations, marketing, design, prototyping and manufacturing services. Some of these offers were from legitimate companies with great products and teams, but many were from criminals, fraudsters and predators who saw us as a potential mark.
We recently ran our second Kickstarter campaign and I can tell you for certain the problem has gotten worse. Our latest campaign was fully funded in seven hours and a fully funded campaign attracts even more vultures than a campaign that barely squeaks by. Predators know that the creator is definitely going to receive the funds and so they set out to gnaw off a piece for themselves. Our team was inundated with unsolicited e-mail and phone calls from hucksters trying to separate us from our funds.
Usually I’m pretty good at sussing out fraudulent activities. In addition to my civilian role as an entrepreneur I’m an Air Force officer. I lead a cyber red team element for the Air National Guard that is responsible for training network defenders by replicating criminal activity. That means I’ve studied hundreds of cybercrime tactics and get paid to replicate them on exercise networks. Seriously, they pay me! ( We’re hiring if you’re interested )
Whaling attacks, spear phishing attacks, watering hole attacks, network intrusion, social engineering, DOS, DDOS, TDOS – you name it, I’ve studied it and my team can replicate it on a network. You’d think this training would make me immune from scams, but even I got taken by one of these scam artists during our most recent campaign. Here’s the story.
A few days into the campaign we were approached by a man named Taylor Andrews who said he ran a firm called Starting Smart PR. He indicated his firm was small, just him, a friend and a few contract copywriters. After our first two days were wildly successful we were interested in capturing the momentum by getting more articles written about the
campaign. So after talking to Andrew and finding him likable I decided to hire him. I’m always interested in supporting scrappy young entrepreneurs.
The first warning sign that this was a scam was that Taylor wanted his payment up front,
however, I ignored the red flag. We were super busy so rather than dig deeply into his
background, I wrote the contract to allow us to review his performance every 10 days. That way if things weren’t working out we could terminate the relationship with only a little out of pocket.
I then consulted with an experienced mentor who suggested that the best way to get the
media to write about the campaign was to make myself available in person. I booked tickets to New York for two days and LA for one. Then I told Taylor and my assistant to fill the days with on-sight interviews. I would go for an in person visit with any reporter who was interested. A week later I was sitting in my hotel in New York with two days of empty schedule. Same for LA. Failure to perform? Second warning sign.
Next thing I knew Taylor was asking if we’d be a reference for another potential client. This was a huge red flag. The contract wasn’t even complete yet, I was already unhappy about the blank schedule and this guy was already asking us to be a reference?
Something stunk, but once again I was busy and ignored it. Now I have to admit to some culpability here. Taylor sent us several e-mail messages asking about his 10 day review which I’d been too busy to conduct. Frankly? It was going to be confrontational and I was avoiding it. I don’t always avoid confrontation, but in this case I was slacking off. I should have reached out and terminated the relationship after spending two days sitting in my NYC hotel room.
Then out of the blue I got an e-mail with the subject line “Forbes Interview.” that appeared to be from Andy Robertson. Andy is a well known reporter for Forbes Magazine who covers products like ours. Here is a the message in full:
Nice to meet you, my name is Andy Robertson and I write for Forbes, The Guardian, and a few others. I had lunch today with my friend Taylor Andrews, and he asked for my help. Taylor is a good friend of mine and I was alarmed to hear that you are refusing to pay him despite him getting several articles written about your product.
If you do not pay him, I have informed Taylor that I am willing to write an article about your campaign taking advantage of marketers, and is thus a high risk campaign for non-delivery to backers.
I am a columnist with Forbes, and I want to make it clear to you that you need to pay him. If you do not pay him, I will be writing my article.
But if you do pay him, I will not write the article. Again, no article will be written as long as you pay him.
When I read this it came across as an extortion threat. In fact it is an extortion threat. Pay Taylor additional funds or have the company’s reputation damaged in a major national publication.
This was extremely alarming. Thank goodness Forbes has written about me and my various projects several times over the years, so I reached out to my contacts and, guess what? That e-mail? It didn’t come from Andy Robertson. In fact, the real Andy Robertson had no idea that someone was using his picture, articles and name. Turns out Taylor Andrews had fabricated the website http://www.wordsbyandy.com and was using Andy’s identity in an effort to extort funds.
The editors at Forbes launched an internal investigation after receiving my message and I cut all ties to Taylor Andrews. Though I was originally willing to settle the contract up through the day I received the extortion threat ( fair’s fair, I hadn’t fired him and should pay up to his final day ), after finding that he had stolen Andy’s identity in an effort to collect funds I decided he’d never see a penny. I’m out the first $1,000, but I think the lesson is well worth the money.
So how can you learn from my mistakes and avoid getting taken when you run a crowdfunding campaign?
1. Figure out what services you need in advance and reach out proactively. There are a ton of reputable providers out there like Tross and Jellop who can help teams to find a marketing message that fits them. They work partially on commission so you can be assured that they want you to succeed.
2. Vet any potential vendors carefully. Taylor wanted to use me for a reference because he didn’t have any other clients who would refer him. Ask potential vendors for three or four references and follow up. If the references don’t respond or are unwilling to provide a good reference, avoid the vendor.
3. You can also look at the company and employee LinkedIn accounts to see if they are somewhat legitimate. Legitimate accounts are thoroughly filled out, show employment history and have dozens or hundreds of connections. If the account is new, has little information or no connections it may be a scammer.
4. Make sure the company is legitimate. Check with the Secretary of State in their home state and be sure they are in good standing.
5. Ask for a bank reference and check their balance. If they have less than $1,000 in the bank they are probably not a legitimate enterprise.
6. Never pay in advance unless you have done a thorough background check. Also avoid wiring money or sending checks to a new vendor. Use a negotiable method of payment like a credit card or PayPal. These payment methods allow you to dispute the charge if it turns out to be a scam.
If I had followed these rules, this is what I’d have found:
1. I would have reached out to a legitimate PR firm and created the relationship proactively and skipped all of the drama that followed.
2. Taylor couldn’t provide a list of references because he’s never had any happy clients.
3. His company does not appear in LinkedIn and, interestingly, he doesn’t appear to have a personal LinkedIn profile either.
4. His website was registered just a couple months before the campaign – November 2017 and is registered anonymously.
5. Searching the California Secretary of State’s website ( Taylor claimed to live in San Francisco ) turns up no company. Searching Colorado’s database shows that the company was formed in December 2017. The company was only 2 months old at the
time I was targeted.
6. I also could have done a web search which would have turned up this gem of a review or this diatribe about Taylor Andrews and his partner Kyle Staebell’s past adventures in scamming crowdfunding campaigns. Turns out they’ve had multiple entities over the past several years and have successfully targeted other creators. This could have saved me the $1,000.
All of these risk factors should have been considered before I decided to work with Taylor.
Could it be that he is a young entrepreneur who doesn’t know how to manage clients and accounts receivable? Possibly, though stealing Andy Robertson’s identity points toward more malicious motives.
With all of those red flags showing I should have been able to steer clear of this individual, but seriously, why should I have to do all of the work? Reputation systems have been a part of the Internet since the mid 1990’s, why doesn’t one exist for crowdfunding vendors?
With crowdfunding growing in popularity and new platforms popping up to do equity crowdfunding it is time for the platforms themselves to band together to solve this problem. If Crowdfunder, Indiegogo, Kickstarter, SeedInvest, StartEngine and the other platforms all got behind it, a reputation site could be a great way to filter out the scammers.
This system would work like this:
1. All of the crowdfunding platforms would point new creators or entrepreneurs at the site to read vendor reviews and validate vendors. They would hammer this message home a few times during the campaign so that creators would know where to go to evaluate the hundreds of offers they get during the course of the campaign.
2. Vendors would sign up for accounts and prove their identity by submitting their certificate of good standing, driver’s license photo and other basic information.
3. Creators would be able to review vendors on a 5 star scale and leave detailed written reviews.
4. Vendors would be able to respond to reviews. If a creator put up an unfair or biased review they would have some recourse.
5. The entire site would be supported by the crowdfunding platforms as a way to reduce fraudulent activity. No advertising, no fees. This would ensure that the site was impartial and to the benefit of both creators and vendors. By making a site like this available the crowdfunding platforms could reduce fraudulent activity and create a vibrant ecosystem of reputable vendors to help creators succeed. This would be a huge boon for transparency and a valuable addition to the crowdfunding community.
I shared this article with Kickstarter to both caution them and get their feedback. Here is the advice they had for us and others looking to crowdfund:
Hi Josh, we’re so sorry to hear about your experience with Taylor Andrews.
As for me? Next time I’ll be more careful and I’ll follow my own advice. Caveat emptor.
Mycroft’s First Officer, a serial entrepreneur and Air Force Officer, Joshua brings more than 15 years of leadership experience to the Mycroft team. He is a strong supporter of the open ethos, net neutrality and consumer privacy. Joshua lives in Holualoa, Hawaii with his wife and co-founder Kris Adair.