The class action suit against Makerbot/Stratasys for lying to investors about the 5th Gen product line has been dismissed, apparently because securities fraud has a very high burden of proof in the US.
Here’s what’s amazing: the judge ruled that the plaintiff successfully showed a “reasonable inference of scienter” (meaning a reasonable person would conclude from the allegations that there was an intent to defraud) but a “reasonable inference” isn’t sufficient in this kind of case – you need a “strong” inference for the case to proceed.
So, the case has been permanently dismissed, barring an appeal to a higher court.
The judge also declared that the complaints about the 5th Gen product quality were “inactionable puffery” which is simultaneously amusing and infuriating. Bre and Lawton knowingly sold a defective/unreliable product to hit their Stratasys post-merger sales targets and reap a giant payout, but that’s not actually pertinent to the securities fraud class action suit.
Bre and Lawton already cashed out. The people who ran the company into the ground got millions for it. The people getting screwed by the reputation damage now are all the workers losing their jobs.
(I don’t feel as bad for people who got screwed on Stratasys stock. Sorry, they bought into a hype bubble. Shit happens.)
Oh, by the way, some of the same people who destroyed Makerbot are now behind GlowForge. Hope none of y’all backed that one.
Bre and Lawton and I think some other early MBI people were briefly listed as advisors or some such when GlowForge first launched. That info got taken down as MBI continued imploding. It’s been a while though, I don’t remember details.
Yeah, he is an investor among with many others. Bre and Jenny Lawton are not running glowforge. To infer that the past of one of the investors companies will now ruin another completely different company, is just plain false. While investors do have some leeway in the decision making process, I doubt one of the things they will want is to ship an “inferior” product. That wouldn’t be a very good investment. We will have to wait and see the finished product before making any judgments. So far though it is still the best thing on the market for that price.
@Ryan_Branch it’s the worst thing on the market for the price, because it’s literally not on the market yet. It’s a year delayed at this point.
Angels and VCs play a big role in the strategy and culture of a startup. They’re not just writing big checks, they also give advice and guidance and provide key connections to resources like specialized lawyers and accountants and compensation/HR types (who in turn are critical in structuring the company and its incentive schemes). And then in return they push for monetization and demand high exit multiples via IPO or sale in a few years. If you recall, the need to satisfy investors like Bezos was the big driver for Makerbot going closed source and selling out to Stratasys. MBI had a ticking clock as soon as they accepted VC money.
The initial GlowForge VCs were also investors in Makerbot. They brought in Bre and Lawton to back GlowForge and put Lawton on the advisory board.
So, for investors we have people who guided and pushed MBI in the unpleasant direction they went, plus the people who actually ran MBI into the ground, and a few other VC funds and angels. Great roster of advisors and equity stake owners there.
Then there’s the entire “3D laser printer” concept, clearly a dodge to try to shed the competition and industrial tooling baggage that comes with laser cutters. It’s an awkwardly small lasercutter that requires the cloud, doesn’t come by default with a fume handling system despite being apparently intended for use by moms and teens in their kitchens, and has a few neat features (that mostly haven’t been demo’d in the wild to my knowledge) plus the functionality of (already free) 123D Make.
Selling a high-powered laser device directed at artsy types with no relevant laser or CNC competencies, promising a seamlessly easy consumer appliance experience, is fraught with risks and challenges. I will be pleasantly surprised if it doesn’t burn anybody’s house down, let alone delivering all promises to backers.
I agree with most of that. Makerbot went into the ground because they sold a faulty product and refused to fix it. Investors definitely had a hand in pushing towards the merger with stratasys. They wanted their payday, and I can’t blame them, but the investors didn’t push the 5th gen out the door. That was the leadership at Makerbot.
We will have to wait and see about the glowforge, but if it is a faulty product, you cant blame the investors. That would ultimately be the main people in the company including the CEO ,engineers, etc. Glowforge is a completely different company than makerbot though. The CEO is “MakerFriendly” even though its a closed source design, they are relasing the firmware under an open source license when its shipped. (You void your warranty of course if you modify it) The glowforge does come with a fume handling system! Both air assist, and extraction. The filter is extra if you don’t want a hose going outside. It’s also not that small of a build area as most epilog cutters have a very similar build size, and its still larger than a K40. Most of the features have been demoed in the wild too. The “trace” feature along with the easy placement from a tablet, and the 3d feature (basically engraving in 3d, still not a “3d laser printer”, but it can add depth to the engraving), have all been demoed. There are currently some beta units out there, although only one public beta. You can watch some of the videos he’s posted here. https://youtu.be/HY8KQTkZZ-s
If the investors ask to ship out earlier with an inferior product, than I can see where you are coming from. So far though Dan (the CEO) seems committed to not shipping an inferior product which is the main reason they delayed the shipment. (reliability of the power supply) Another thing to note is that this wasn’t a kickstarter. It was a pre-order. I can get my money back at any time. I still believe that they will ship a superior product than what is currently out there, at an even more affordable price. I will say though that the open source laser cutter market is going to get big within the next few years, with cheaper and cheaper laser tubes and lenses, along with new features added to Laserweb 2.0, it’s getting alot easier to build one, and Glowforge will have to keep up!
@Ryan_Branch I hope you’re right. I don’t think anybody involved in these things ever intends to screw customers. People like Lawton just create cultures and incentives and pressures that lead to failure. (Cult of Done, anyone?) That very much comes from the top. Dan Shapiro seems like a good guy, so there’s hope. Dunno about his experience scaling from a $600k board game Kickstarter to a $28 million crowdfund pre-order though.
Personally, I look at the hype and promises and the people behind the scenes, and I’m going to avoid it like the plague until I’m firmly proven wrong.
@Ryan_Carlyle Gotchya. I think this is his 3rd or 4th company now. There is alot more info on the forums. If I ever get that feeling, I will ask for my money back, but this is by far the most comfortable I have ever been with any of my crowd funding purchases or pre-orders(I have backed/pre ordered the M3d, Kaisr, Planetary Resources satellite, circuit scribe, and even the original Cupcake CNC). I haven’t been screwed yet, but that doesn’t mean I still won’t be. The only thing I am worried about is the tube life. The replacements will be affordable, but that is the one unknown with it.