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Sellaband Files for Bankruptcy in Amsterdam

Sellaband Files for Bankruptcy in Amsterdam

 

Public Enemy had some well-publicized problems recently when they tried to rely on fan-funding to help in the recording of a new album. The hip-hop legends attempted to use Sellaband to raise money for the record, but many fans pulled their donations and the project collapsed. Now, it appears the Sellaband website has gone the same way as that Public Enemy album, opening up pertinent questions about the fan-funding model and its viability.

 

The Sellaband website has been down for several days, and bears a message saying: “We have extended our maintenance window. We expect to be back tomorrow at the end of the day.” But documents filed in an Amsterdam court yesterday (Feb. 22) suggest we may have seen the last of the site.

 

Hypebot believes Sellaband has been declared insolvent, which basically means it has gone into bankruptcy. The folks at Hypebot believe this message in the court documents has sealed their fate: "Pronunciation ams.10.146.F.1306.1.10 bankruptcy after termination suspension on February 22, 2010.”

 

No official word has come out of Sellaband yet, so don’t completely discount a comeback, although what will happen to partially funded projects that were under way on the site is currently unclear. Similar sites, such as Kickstarter, are no doubt following these developments with a mixture of interest and extreme nervousness.

 

[via Hypebot]

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Public Enemy

I never actually visited the site, but what was the business model? Also, why did people pull their cash from PE's record?

/site_media/uploads/images/users/brandon/216_browser_clut.gif brandon

I think it was nearly identical to Kickstarter. You pledge a certain amount of money toward the completion of a project, and various goodies are offered to you depending on how much you contribute.

/site_media/uploads/images/users/nick/461770063_f6a8d92e3a_s.jpg nick

Sellaband kept all the money that was donated, holding onto it in escrow until a project hits the goal and if it failed, you were only given credit to use on another another project. It seems like Kickstrter doesn't hold the money and just cancels pledges if projects fail.

dan s

Dan S is wrong. An investor's money was only tied up after the project reached target; until then you could withdraw from that project and the money would boost your balance to spend. At any time you could ask for actual cash to be returned to you if you wanted to leave SAB yourself or reduce your investment.
If a project failed on the way to 50k and/or the artist left Sellaband for another reason all money invested in that artist was returned to the investor's balance with SAB (from where as I say you could choose to invest in someone else or to have your money back).

Richard Markham

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