Cashbox controversy

In less than a week, a Chico entrepreneur raised, and subsequently lost, a fortune in seed money pledged by investors through an Internet crowdfunding effort.

August Germar’s Kickstarter campaign launched on Oct. 12 and by the end of that day had raised about $2,000 in pledges toward his ultimate goal of $7,500 to mass produce a new Internet networking device dubbed the Anonabox.

“I thought that was pretty great,” Germar said. “I figured at that rate I’d be able to meet my goal in a couple of weeks.”

With Internet security and censorship both major concerns in today’s tech-driven society, the timing certainly was right to introduce Germar’s palm-sized device, which can be configured along with a modem and wireless router to most home and office computer systems. It serves the dual purposes of providing anonymous, encrypted Internet access to users by using open-source privacy software called Tor, and offers the ability to circumvent blocks meant to censor Internet access.

Germar woke the next morning to find backers—who would receive an Anonabox of their own for contributions of $51 or more—had pledged more than $44,000. Tech news websites took note of the device’s capabilities and a burgeoning base of investors (gadget-watch heavyweight Wired, for example, ran a favorable article), fueling more contributions. At the end of the second day, pledges totaled around $120,000, and they kept pouring in until the project attracted a total of 9,191 backers pledging $613,749 in just four days.

“I was definitely surprised,” Germar said of the campaign’s runaway success. “It got way more interest than I ever expected.”

However, the Anonabox’s success also garnered scrutiny from some technophiles. Critics claimed it relied on a motherboard and case made by Chinese manufacturers, which goes against Kickstarter rules that items cannot include off-the-shelf hardware.

Some backers pulled their pledges over the next 24 hours, and on Oct. 17 Kickstarter suspended the campaign, with $585,549 in promised funding remaining. None of the money had yet been charged to contributors’ credit cards.

“We may suspend projects when they demonstrate one or more of the following: Offering purchased items and claiming to have made them yourself; Presenting someone else’s work as your own; Misrepresenting or failing to disclose relevant facts about the project or its creator,” Kickstarter said in an email to would-be Anonabox investors, according to Digitaltrends.com and other sources.

Germar stands behind the device. He acknowledged that the motherboards are made for him by a Chinese engineer, but said not mentioning this fact in his Kickstarter campaign was an oversight, not a deliberate plot to pass off someone else’s work as his own. He also explained the Anonabox is a retail-ready version of do-it-yourself devices that can be built at home by purchasing the parts online for about $100.

“It’s just like you can easily brew your own beer at home if you want to,” he said, “but most people prefer to go to the store and pick up a six-pack.”

Germar said accusations that he copied an existing device are also false because his Anonabox has been in the design phase for four years. The device introduced on Kickstarter was the fourth incarnation, with each generation becoming smaller and better.

He also doesn’t believe he broke Kickstarter’s rules and is uncertain of the company’s reasoning for the suspension (they have not responded to his emails and have no phone number available, he said). One thing he is certain of is that, once suspended, Kickstarter projects are never reinstated—he will never see a penny of the more than half-million dollars his project could have collected.

Germar said that, despite the lost pledges, he’s more relieved than upset with the suspension.

“There are a lot of problems involved in managing Kickstarter campaigns after they blow up like that,” he said, “and I was already getting overwhelmed. I had more emails than I could possibly even respond to, and my goal was to make a few hundred of them initially, not figuring out how to manufacture thousands.”

Germar said the goal of the Kickstarter campaign was partly to raise funds for a small production run, but also to connect with fellow developers to help him improve the product. He said he succeeded in that aspect, and plans to have an even better version of the Anonabox ready to sell to the public early next year. He also said he’s receiving an ongoing flood of emails from still-eager customers, despite Kickstarter’s decision.

Such a device could be useful in many ways, Germar explained, from workers using it to access Facebook or other sites often blocked by employers, to baseball fans accessing games during network blackouts, to foreign journalists and political activists accessing social networking and other sites censored by the government—he cited Egyptian protestors blocked from Twitter during 2011’s Arab Spring uprising as an example.

For more information on Germar’s device, visit Anonabox.com.