Crowdfunding platform PledgeMusic has been credibly accused of theft. The company has also acknowledged that funds raised by artists from their fans have been used by the company to pay its own expenses and they can’t currently pay it back.
This would probably be enough to bankrupt most companies – yet PledgeMusic is astonishingly trying to leg it out.
It became a little more difficult when the company first suggested artists suspend any ongoing fundraising campaigns on the platform, and then blocked them outright. If you attempt to contribute to a campaign today, you’ll receive a terse message indicating that PledgeMusic has “suspended pledges on all active campaigns and will look to resume them shortly.”
Essentially, PledgeMusic is no longer conducting business operations – without actually shutting down.
PledgeMusic was engulfed in turmoil in January when several artists went public with claims that the company wasn’t paying out funds raised from fans for albums and other projects. PledgeMusic acknowledged it had used these funds to cover their own expenses but promised to seek help from “investors” who would bring all accounts current in 90 days.
PledgeMusic has not stated why they froze new contributions, but it may be a matter of legal liability stemming from this admission that the company is not, it appears, financially solvent.
The co-founder of PledgeMusic, Benji Rogers, has returned to the company as an advisor and help work out the situation. After a post in which he said that new contributions would be deposited with a third party (and thus outside of PledgeMusic’s control), he took to twitter to ask artists to “please stop abusing the customer service & campaigns teams”:
They are working night & day to help fix this problem for you. A problem that was not of their making. Whether by phone or by email, your threats hurt the chances of a positive outcome more than they help & are unfair to those who want to make this right.
— Benji Rogers (@BenjiKRogers) February 3, 2019
And that’s it. The company posted one update on February 15 which contained no useful information and just directed artists to a generic FAQ.
The comments were left open and it’s not pretty.
Meanwhile the Dandy Warhols are among the artists whose funds are currently frozen by PledgeMusic – fans have paid, but the artist can’t access the money and Pledge isn’t responding to queries. The group, like other musicians, is encouraging fans to contact their bank or credit card company to process a chargeback. “Call your banks and credit card companies right away to open claims for reimbursement that way,” they’ve posted on social media. “Do not wait to hear back from Pledge Music. Take action immediately.”
— The Dandy Warhols (@TheDandyWarhols) February 18, 2019
PledgeMusic’s demise now has to be considered one of the most spectacular flameouts in the industry (which industry exactly – music or tech – take your pick). The company served a valid purpose and had built a decent business. They could have raised their fees to cover expenses, but instead tried to catch up by dipping into the artists’ kitty. There are very few circumstances in which raising money for a stated purpose and using it for another doesn’t amount to fraud; it’s not clear why Rogers would want to be associated with what appears to be financial mismanagement if not crime.
It’s also not clear what more the company can do short of receiving funds from new investors, or how long it can last with no new business.