Survey results, Reboot or Hibernation

At now I’ve no job, so I can’t put any money in the reboot. Only thing I can do is loose my contributions as dwarf backer and donate to the community… Only I don’t know if it’s possible and how to do it.

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Here to let you know I’ll pay the extra €150 to get my hands on my Tier 3 Founder’s edition unit.

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The 150€ additional payment is meant to receive a Tier 3 Dwarf unit plus a 150€ rebate coupon.

What about my tier 2 unit? Do the remaining tier 2 get filled first if they also pay?

@gianfranco just a thought (I have no programming skills, and I don’t know whether this is possible/feasible): would other European (boutique) hardware companies be interested in investing in MODDevices, in return for future access to the company’s IP or FX algorithms through licensing? I can imagine companies like Polyend, Modal, Waldorf, Elektron, even Thomann might be willing to help a brother out…
Also, the MOD technology might lend itself to licensing for repackaging in other forms, giving boutique pedal builders a chance to use the MOD platform to develop their own, more sharply focused effect devices. After all: a lot of musicians simply like to play; not noodle around with deep gear.



We are moving the forum between servers to avoid it going down as other services are put down. In this transfer process, there was a mismatch of Discourse (the forum engine) versions and a rollback was required, unfortunately leading to the loss of some messages.

The forum should be normalized by now.



When we say Tier 3 we are actually meaning the outstanding crowdfunding units. There are a couple of Tier 2 included.

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I am in the same position as you and I have thought about this myself. I would gladly lift MOD of that promise and and convert it to an investment. I have bought a Dwarf in retail before the insolvency because I just wanted to try it.

I think the crowd founded money (which is already spent) is simply part of the insolvency mass as well as the obligation produce/ship the promised units.

The only conceivable way would be to invest upfront and make MOD then promise to reimburse you after successful funding.

@gianfranco Is something like this possible? I think you have already a lot parts on site. The produced Tear 2 units could go to retail then.


I was lucky enough to get a Dwarf in July 2021 and have used it extensively on gigs. I love it. Definitely worth anything you can do to keep this thing alive and viable.

Just a note of caution if you are in the UK, like me, that you will be charged VAT on import. Despite the fact you thought you might have paid this already in your initial crowdfunding amount! It added something like £70 to my dwarf when I got it. Brexit happened in between the two, and that’s what’s caused this problem. So just factor that in. Keep the faith, though, it’s worth it.


Hi @thfr and @Alberto_Pisani

Lifting the delivery of your crowdfunded units would help only in the long run and would not have an immediate effect on the reboot. We have already pushed the crowdfunded units forward to avoid the cash flow burden.

The reason we are asking for the 150€ is also to avoid the burden, as we cannot take it right now. But we will commit to delivering if we can relieve the burden with such payment.

Legally there is no obligation. Crowdfunding is a bet made by the backers. If the project goes bust without fulfilling all the pledged rewards, it is part of the risk and the crowdfunded money is not part of the insolvency mass.

We are committed to these fulfilments because there is a moral duty and I see that ultimately this is a commitment between the backers and myself.

We keep committed to delivering this units as cashflow allows. If we manage to reboot and stabilize finances, we will be able to reduce the required payment to 100€, 50€ or even for free. But that cannot happen now.


@gianfranco and @friedsilence,

By pledging to invest in the company, are we acquiring a stake in the business?

If so, will investors have access to detailed information on the financial health of the company (assuming it will be a new entity?) and also be able to give feedback on intended investment – not a “vote” as with ownership of shares, of course.


The invest type is a participation based loan, the payout is directly linked to any valuation event or profit of the new MOD entity in the future. Unlike ownership shares, there is no external transaction cost (like notary etc.) and the loan can be terminated to get payout after 2025.

We will provide access to a dashboard with financial and other KPI to investors. Also a closed discussion group for investors would be easy to setup.


I thought this was interesting and relevant to our current moment: "Secrets" about the consumer audio business you may find interesting | Audio Science Review (ASR) Forum

Reading through the breakdown, it seems like the MOD story could intersect with many of the points listed. At least, the implications of continuing to rely on fundraising for production don’t seem good.

A relevant comment from Hacker News:

The cost of building a consumer audio product is generally no more than 30% of retail. 30% COGS (cost of goods sold) is virtually a maximum for items sold at mainstream retailers.

There’s nothing wrong with this. These are standard ratios, not some dirty secret.
The cost of goods sold is only a fraction of the costs that go into getting products all the way into the customers’ hands and supporting them (customer support, warranty replacements, lost shipments, fraudulent orders, etc.). That’s not even counting the R&D investment costs that go into making the product, as the post says.
Salaries, warehousing, shipping, insurance, and all of the others costs of doing business add up.
It’s not actually realistic to expect an entire company to be selling you a $300 product that costs them something like $250 to build. Every business in existence must build in enough margin to pay the people who do all of the work to make it happen and support it.
If this seems shocking, consider that the COGS of software as a service products are much lower by comparison. Doesn’t matter, though, because you have to pay all of those expensive salaries to make it happen.


Other than the dashboard, that would be greatly helpful.

Can you try to push the deadline for V2 further down the road?


Hi gentlemen

I made a post focusing on the fundraise that has a deadline for tomorrow.


I see the $200K has not been reached yet, which may mean an end to the issue, but just some thoughts as a tier 3 backer:-

There might be a time when I am happy to pay 150 in order to secure my Dwarf, but frankly the Dwarf is not as attractive a proposition until MOD is meaningfully back on its feet. For example, what service guarantee is there coming from a company that is on its knees? What likelihood of plug-in developers continuing to invest their time in a platform that is hanging by a thread?

In the light of this, MOD is really asking us to pay significantly more for a product that does not have the same prospects as it appeared to when I kickstarted it. At the moment, agonising though it is to see such a forward-looking company struggling to raise what seems to be a small sum of money, I am too cautious to commit those extra funds until the future looks more favourable.


Thank you for your commitment and openess. Not many would follow the same path!


I’ve been using my old kit instead of my Dwarf for a few days for no particular reason.
Last night I went to practicing with my Dwarf and was taken aback at what a lovely sound I get from it, and how in so many ways it’s just perfect for my needs.

I’m not sure what the chance of success is even if we cross the 200k threshold but I’ve decided I’m in. I love the community and the ethos and I don’t want it to fail.

I’ve pledged some money towards the reboot that should take you over 170k pledged at time of writing.

Hope you get sufficient additional commitments to go ahead - good luck!!


@unbracketed thanks for sharing this comprehensive thread about the “secrets” of audio electronic business!

Having also owned bigger hardware portfolios in the sector before I joined MOD, I can second general statements, while I won’t comment on any details due to non disclosure obligations. I also worked in more mainstream consumer electronic markets in the past, where the sales price to unit cost ratio is usually smaller. But those operate on a different scale, making it easy to amortise massive R&D budgets and overhead costs.

I think it is important to consider that the sales price to unit cost ratios mentioned in this source are for hardware products with low to no further development after sales.

It’s a key value proposition of the MOD platform that it is not that static. Still continuous development with growing expectations is just not covered from past hardware sales income. It’s possible though to finance it for products with sustaining good sales (1) and healthy gross margin (2), augmented by another revenue stream from the previously sold population (3). In an early stage, investors would fill the gap, but they only do so in expectation of a black bottom line from (1) + (2) + (3) sooner or later.

The MOD business model has the foundations. As discussed already pretty much, MOD was not able to reach (1) + (2) so far and (3) in the form of our plugin sales cut is not sufficient to compensate given the MOD devices population. The MOD reboot is taking all this into account. The priority is to fix (1) as the biggest lever given our marginal market penetration. In times of shortage and inflation (2) stays challenging, though the focus on the MOD Dwarf gives us a boost and we now have all the data, unlike when launching the crowdfunding campaign. Ultimately (3) will play a major role, but it’s pointless to push that at the moment. It shall come naturally with plenty of sought after commercial plugins and maybe other premium services users are happily willing to pay for. While not limiting any preexisting and good enough use case.

I believe we cannot survive with a money first mindset, neither can we as a cash drain. All the financial considerations are key to ensure the MOD platform can persist and grow.


Like @friedsilence, I cannot disclose details but I can offer 2 more examples:

  1. One software and hardware company for musicians has a street price of one of their devices at about 100 Euro and the production cost, shipped to Europe, is a mere 18 – less than a fifth. When I asked about the cost, the response was that the continued development cost of the base software was very high and that more than 90% of all software sales took place at discount seasons and as add-ons/upgrades to existing software. I also inquired about the revenue post hardware sale and the response was that, being all licenses perpetual, unless new versions and add-ons were continuously upgraded, item #3 would fall over time;

  2. A Hardware company has a plugin software and offers accompanying software for users. The HW price is in the 1/3rd of retail range, but they agreed on contract to play the plugin developers (one of whom I know in person) to pay a percentage of each sale as opposed to one giant payment upfront – which is the reason he always know how good or bad sales are going. However, over time they had distribution issues with their SW suite and that squeezed their profit margin. Other than sourcing parts and also due to the tariffs imposed by the US on Chinese made goods, their price went up by some 20% in the last 2 years. It is a hardware that has seen near zero development since its release almost 10 years ago, and the SW sees a very slow improvement.

These examples put MOD in the situation where the price of HW is at the dangerously upper range of the production/retail ratio with very high software/OS development costs. Whereas the Dwarf can stay as it is hardware-wise for the foreseeable future, R&D will always be running at a high cost. And there’s a chance either chips or boards will be discontinued, so there’ll be the need for further hardware development.

In this scenario and with finds allowing, if MOD could output a vast number of units in the next year or two, enough to clear any backlogs and have some inventory for current and future dealers, that would ease the pressure on assembly and testing and clear the path for a more intense OS/plugin development.

I’m hopeful this round of funding is successful and that MOD can stay afloat with enough sales, so a new revenue stream based on software can come in and provide some cushioning for the next HW drive.

Good luck.


I’m a tier 3 backer and I have no issues with paying extra for the Dwarf.