Tech company that raised millions through crowdfunding shuts down, with most backers receiving nothing

A tech company that received more than $3 million from supporters through Kickstarter and Indiegogo announced this weekend that it has run out of money, and thousands of people who pre-ordered their product — headphones with surround sound used for virtual reality — are out of luck.

Ossic sold 22,000 pre-orders for its OSSIC X headphones, which cost between $200 and $300, but only 250 backers ever received a pair. The headphones were an "ambitious and expensive product to develop," Ossic said, and "what made this project so exciting, and ultimately ended up being its Achilles heel, was the complexity and scope." Over the last six months, "dedicated" employees worked for free, "doing anything they could to try and make the company succeed," Ossic said, but it wasn't enough.

The company, which also received millions of dollars from angel investors, said it would need more than $2 million in additional funds to be able to deliver headphones to everyone who placed a pre-order. "Inventing something new while also developing complex hardware is expensive," Ossic said, adding that the "unknowns that come from ground-up development with so many new features ultimately stacked up to create delays and cost overruns." In 2016, Ossic said these headphones of the future would be able to sense ear shapes and customize sound for each person, Business Insider reports.

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