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19 year old files S1 (IPO prospectus) to raise $12,500 for his beer pong company
- ovi256 16y agoFunniest S1 filling ever. Just have a look at the Risk Factors section.
- mritun 16y ago"Because our president, Mr. Richard, currently owns 100% of our outstanding common stock, investors may find that corporate decisions influenced by Mr. Richard are inconsistent with the best interests of other stockholders." ROTFL. Is this for real?
- deleted 16y ago[deleted]
- zach 16y agoWow. That is, dare I say it, ballsy. I think this is destined to be an interesting anecdote for Mr. Richard later in life. I get the feeling the lawyer, Rory Vohwinkel, is a family friend who does this all the time (Las Vegas is ground zero for, er, marginal corporations). Interesting note - it's $12,500 for 20% of his company, a typical seed-level investment. I often wonder about the wild and woolly world of penny stocks, but never to invest in. Does anyone know what the downside is for this company if they have no better funding options (and I wouldn't be shocked to find out they didn't)? Also, this guy's business approach is still far superior to that of the Bulletball guy. http://www.youtube.com/watch?v=WOOw2yWMSfk http://www.youtube.com/watch?v=WOOw2yWMSfk
- jackowayed 16y agoAttempt at a summary from skimming it: * He sells "custom-made beer pong tables and related products" * No revenue to date * He owns 9.5M shares, and he's trying to sell 2.5M shares of new stock for a total of $12,500, which I think means a pre-money valuation of $47500 ($12,500 * (9.5/2.5)) * One of the risks he lists is "If we do not obtain additional financing, our business will fail." * He plans to use the money to build tables that he can sell, including designing and building themed tables (such as a table with a college's mascot and such on it) and to build a good website
- dolinsky 16y agoNot to mention he's entering a market that already has complete saturation of competitors. He'd do better making beer-tasting ping pong balls than manufacturing beer pong tables at this point.
- bryanh 16y agoWell, that being said, it's a growing market and the winner may not take all, but they will take a large chunk.
- JacobAldridge 16y agoBrilliant. I assumed Finance Major at UNLV but he seems more rodeo champ - http://www.myspace.com/turnumburnum http://www.myspace.com/turnumburnum Check out the MySpace wall post from BrO4LiFe13 on 4 Feb (ie, just over two weeks before the company was created): "there is some ppl that want a beer pong table so if you want to make some money tell me". From such things, a business empire may be born.
- coryl 16y agoOh man, nice find, how did you get his myspace? Someone needs to document this story.
- JacobAldridge 16y agoI am the Google-fu! Specifically, he had his name and undergrad status at University of Nevada Las Vegas in the S1. That gave me his rodeo credentials; plus "beer pong" gave me the MySpace page which linked them together.
- bryanh 16y agoBrilliant. I'll work up a blog post for giggle's sake. More to come.
- deleted 16y ago[deleted]
- coryl 16y agolol, the kid is doing it all wrong, he shouldn't need capital for anything. The tables should be made to order. All this will do is sink his business in inventory.
- zach 16y agoI can't believe I'm getting into a discussion about this, but I noticed in the S-1 he actually is allotting $9,000 of it for marketing and general expenses. Only $3,500 is for labor and materials. You know, this is such a simple S-1 that it would be a great first example for someone who is learning about the process. This is practically a lemonade stand.
- coryl 16y agoWow, $9k for marketing. I hope this kid is a marketing whiz and has a helluva good product. Otherwise this is going to be a costly lesson. Although to be fair, I've lost just as much as money if not more in my teenage entrepreneurial journey.
- jacquesm 16y agoBut not his money, after all it is a public offering.
- raheemm 16y agoSomeone should tell him about kickstarter
- aditya 16y agoWould you fund his "art" on kickstarter?
- mkramlich 16y agoan IPO for beer pong? he better be Sarbanes-Oxley compliant
- tlrobinson 16y agoIs sarbox such a burden that it would be difficult for a simple one person company to comply?
- anamax 16y ago> Is sarbox such a burden that it would be difficult for a simple one person company to comply? Sarbox is about reporting, not size The simplicity of his biz helps him some but he's responsible to the public for everything.
- arethuza 16y agoIt certainly would be interesting to see - some very strange things are done in the name of "SOX Compliance" and it would be nice to see what the absolute minimum that is required for the simplest possible company.
- barnaby 16y agoCool, so does this mean he can raise investment capital from non-accredited investors? I filed my own C-corp in NY state (All the paperwork is boilerplate, there's just a $200 filing fee)... I wonder if SEC filing is reaching the same level of boilerplate where anyone can do it with standard forms? If so, or if it's so easy a 19 year old beer pong enthusiast can do it, then why are there only about 8 or so IPO's per year?
- rjett 16y agoSo how much is this filing likely costing this kid (lawyers fees + filing fees)?
- brianr 16y agoFrom the section near the end, looks like $9,700.90
- coryl 16y agoOn a side note, does anyone know how bad it is for your name and reputation if the company has to go bankrupt and go through that process? Will he get gray listed for future incorporations, background checks and such?
- anamax 16y ago> On a side note, does anyone know how bad it is for your name and reputation if the company has to go bankrupt and go through that process? Will he get gray listed for future incorporations, background checks and such? The answer is "it depends". Some folks will care while others won't. It's just like the color of his pants, his age, the school he went to, and so on. Note that whether he can incorporate is a matter of law and bankruptcy doesn't affect it. (Being the subject of a consent decree related to securities fraud does, but lots of folks go bankrupt without that.)
- bryanh 16y agoI would imagine that any value he gains from this is "balls". He went out there and did his part. Bravo. Success or failure: he did something. Some will value that.
- bryanh 16y agoDoubtful, though I admittingly have little experience in this. In fact (I would imagine), most places would kill for guys with balls enough to file an IPO. What type of confidence do you need to make this happen?
- jmount 16y agoProbably he then sells to some other company that wants to be publicly listed without filing its own IPO. Its an old scam.
- jmount 16y agoits -> it's (sorry)
- davidu 16y agoThe S1 may seem complicated, but if you've done 409A's and been audited you are very familiar with how these documents get lengthy on their own accord. Much of the language here is boilerplate that is then barely modified.
- grellas 16y agoI must say, it takes a certain kind of flair to conceive and implement a plan to take a sole-founder company that is only 3 months old public for the purpose of raising $12K in seed funding while incurring $9,700.90 in out-of-pocket expenses in the process (see Item 13 for an itemization) - an IPO that will net a best-case of $2,300 for a stock for which the offering entity disclaims that any public trading market may ever develop! This reads like a parody of a typical public filing - every disclosure solemnly declares that the company has no assets, no experience, no prospects, and no future to speak of (other than what one might expect of a very young and very green founder who is 3 months into his first company). This is actually pretty funny - sort of like a po-faced guy intoning in mock seriousness about something he knows is wildly out of sync with reality but never letting on about it. It must be quite a learning experience for the founder and that I assume is its sole point. Quite an amazing story.
- sublemonic 16y agoWhy is the best-case $2,300? The stock could sell for any price if it's offered.
- ahi 16y ago"The sales price to the public is fixed at $0.005 per share" Maximum the ipo can bring in is $12,500. As noted above, expenses incurred by the ipo: $9700.90
- bryanh 16y agoLove it. Interestingly enough there is a (somewhat useless) discussion on Reddit (http://www.reddit.com/r/reddit.com/comments/c6e49/a_girl_named_ali_wrote_sixty_original_songs_and/ http://www.reddit.com/r/reddit.com/comments/c6e49/a_girl_nam...) about a "bully who says he owns the right to "power hour" and is trying to shut [innocent site] down".
- DenisM 16y agoStill it's an interesting question - can a small company go public? I vaguely remember there is a simplified procedure for companies with less than one million in revenue. How much pain is that exactly?
- mml 16y agoYeah. Um, a beer pong company owned and operated by a man forbidden by law in 48 or so states to obtain or possess or consume beer. Ahem.
- mikecane 16y agoSo, is anyone here wondering if they could do this for a software idea they have?