The Skully was meant to be the first augmented-reality motorcycle helmet, giving riders information from their GPS in a heads-up display, and even showing a feed from a rear-view camera in their field of vision. Sounds like an amazing product… that will never actually ship, even as excited backers on IndieGoGo put down amounts from $500 to $2,000 for deposits or pre-payment for their helmets.

The company behind Skully is headed for bankruptcy, which would be a sad cautionary tale for crowdfunders and entrepreneurs if not for allegations from a former employee about what actually happened to some of the money that the company raised.

The ex-employee, as part of a wrongful termination suit [PDF], claims that the brothers who started the company spent part of the $2.5 million that they raised on renting a Lamborghini, buying two Dodge Vipers, four motorcycles (which kind of makes sense if you’re making motorcycle helmets, but not really), a visit to a strip club, an $80 cash payment to a mystery cofounder, and security deposits and rent on the brothers’ apartments.

Backers will have to go through federal bankruptcy court, filing as unsecured creditors, if they want to see any of their money back.

Indiegogo, like competitor Kickstarter, emphasizes that its projects are neither investments no pre-orders: backers are plunking money down on ideas that may or may not become real.

We look forward to seeing some version of this story play out on the next season of HBO’s Silicon Valley.

This multi-million dollar crowdfunding fail sounds like the plxt for a bad movie [BGR]

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