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The Man Who Sold His Fate to Investors at $1 a Share
- antihero 14y agoWhat's to stop a rich asshole buying up a massive majority and then just making him do fucked up stuff?
- geoffschmidt 14y agoIt's sort of a microcosm of capitalism in that respect, don't you think? It's a wonder that our system works as well as it does.
- slygent 14y agoBecause people can choose whether to "sell shares" or not? A controlling stake would be worth rather more than a minority one, surely?
- eli_gottlieb 14y agoYou think capitalism works?
- jnazario 14y agoyeah, i had that idea a long time ago. in a dream i did just this, and then donald trump bought up a controlling interest in me. i had to call him up to figure out which socks to put on. this is kind of a neat idea, an investment in future potential writ small.
- perlgeek 14y agoI guess there are limits to what the shareholders can make him do. After all slavery has been abolished. Still I think it's a quite risky idea.
- frabcus 14y agoHe can refuse to do what he's told to - it refers to this in the article. His share price might then collapse, and he has a substantial financial stake in himself. It's the same as any company - all the staff could refuse to cooperate and walk out, and it would be worth nothing overnight.
- Samuel_Michon 14y ago“The shareholders, meanwhile, were well aware of their power. “If he doesn’t do whatever we say, we’ll sell and his share price will fall,” Berezin says. And sure enough, when shareholders voted him vegetarian, Merrill complied, even though he had been an avid meat eater. He was a longtime Democrat, but his investors decided to make him register as a Republican, which they argued was more business-friendly.” Sounds to me like he doesn't have the power to decide for himself.
- pavel_lishin 14y agoHe has the power, he's simply not exercising it.
- Samuel_Michon 14y agoWould you like to share your thought process, proof or sources? Or is simply disagreeing sufficiently satisfying for you? Elsewhere in this thread, you seem to be making the same point that you're now disagreeing with: https://news.ycombinator.com/item?id=5455642 https://news.ycombinator.com/item?id=5455642 Here's another quote that makes me think he seriously only gave himself nonvoting shares: “shareholders don't dictate what's tabled. We can only vote on what's proposed, the implication being that K5M is fine with either outcome.”
- pavel_lishin 14y agoI haven't read any legal contracts, but I'm under the impression that as a human being, he can decide to opt out of any of their decisions, with the only outcome being his stock price dropping. He's not a literal slave.
- Samuel_Michon 14y agoSure, for the law this is probably just a role playing game. What I was talking about is that within the constraints of the game, he has no vote. Other commenters seem convinced that he has voting shares but promised not to use them. I haven't seen any proof for that yet. I do think that as this experiment goes on and the Kmikeym stock price goes up, the stakes increase and it becomes harder to back out. Imagine: an organized crime syndicate could buy $1 million in Kmikeym stock to launder money – if he does anything that adversely influences Kmikeym share price, he might be in for a world of hurt. Or another scenario: his parents might be so convinced in their son's success that they mortgage their house to pay for shares in Kmikeym. If he screws up, his parents lose their home.
- thasmin 14y agoHe has the overwhelming majority interest. He's promised not to vote with his shared but the option remains open if he's told to do something illegal.
- Evbn 14y agoEven minority shareholders and employees have the inalienable power to decline to break the law. That applies to any contract.
- troyastorino 14y agoWouldn't this be illegal under the 13th Amendment? Isn't it equivalent to partial slavery?
- ryanbrunner 14y agoIs it even partial slavery if he doesn't have voting stock? This article is cute in parts and all, but I really question the legality (and definitely the morality) of this.
- meric 14y agoHe still controls 98+% of shares, which he is choosing not to vote with.
- ryanbrunner 14y agoThat probably changes things then. I mistakenly assumed that his shares were actually non-voting shares, and that he had no contractual right to vote. If he has voting rights but is just abstaining from using them, then that's quite a bit less crazy.
- Samuel_Michon 14y agoYou weren't mistakingly assuming it, it was mentioned in the intro of the article: “He kept the remaining 99.1 percent of himself but promised that his shares would be nonvoting.” There's also no mention of it in the FAQ on kmikeym.com, I'd say it'd be pretty important information to disclose to (potential) investors.
- ubercow13 14y agoThere's a difference between actually non-voting and with voting powers that he has promised investors he will not use.
- Samuel_Michon 14y ago
- mhb 14y agoHow much for a kidney?
- brianbreslin 14y agoBrilliant ending. Would love to see a follow up. What happens when he wants out? Does he ave to buy everyone out? File for ch 11?
- TheCoelacanth 14y agoI can't imagine this arrangement is legally binding. The 13th amendment kind of interferes.
- logn 14y agoAlso, courts don't enforce 'unconscionable contracts'
- brianbreslin 14y agobut he intentionally entered into this arrangement on his own free will.
- TheCoelacanth 14y agoThat doesn't matter. A voluntary agreement is only valid to the extent that it is legal.
- shanelja 14y agoI can't help but feel that if this was financially legally binding - for him to have to pay these dividends - it would be a great way to fund your way through college, E.G: I'm too poor to afford college, if you fund me the $40,000, you can have 10% of my life income. It makes sense, assuming you pick your candidates wisely and aren't scammed (and that's a big if!): $40,000 down-payment for 10% 10% per year for $3,500 per year [1] over a career of around 30 years: 30 * 3,500 = $105,000 Average profit: $65,000 [1] http://en.wikipedia.org/wiki/Personal_income_in_the_United_States#By_educational_attainment http://en.wikipedia.org/wiki/Personal_income_in_the_United_S...
- mootothemax 14y agoFrom the article: "Upstart.com, a company founded last year by Google exec David Girouard, offers a bit of capital in exchange for a cut of a college graduate’s future earnings."
- shanelja 14y agoI checked the link - it's not exactly right, they are funding graduates who have already completed their college course, and it has to be minimum a 4 year course. What I meant, was funding 18-30 year olds to actually go to college, obviously, something like "history of art" would probably not have significant returns, but a Masters in CS? They would rake the money in. (P.S. It's US only unfortunately and I'm in the UK)
- sksksk 14y agoI'd say that student loans in the UK work more closely to how this investment scheme works (you only pay back if you earn over a certain threshold)
- count 14y agoHow is this different from a student loan? Bank gives student $100k, student pays bank $250/mo for 30 years (or whatever the terms are).
- chiph 14y agoThis is essentially the plot of The Unincorporated Man. Only with micro-managing. http://en.wikipedia.org/wiki/The_Unincorporated_Man http://en.wikipedia.org/wiki/The_Unincorporated_Man
- deleted 14y ago[deleted]
- alexjeffrey 14y agothis is insane - the investors' plans are very unlikely to align with his personal wants and needs (unlike a business where the goal of making money is shared between the business and its shareholders). some of the examples in the article make this abundantly clear: * the sleep experiment, where he was obviously suffering by the end * the gay relationship which, while the article doesn't mention whether Merrill is bisexual, certainly seems to imply that he isn't and went through with the relationship to appease his shareholders
- heiska 14y agoIt's not insane. By definition, insanity is doing the same thing over and over again expecting different results. He changed his sleeping routine and had a homosexual relationship, found out they didn't work out for him, gave up on them. Nothing insane about that.
- tjic 14y ago> By definition, insanity is doing the same thing over and over again expecting different results That's a pithy cliched phrase, but it's not the definition. One really needs to read through the DSM (it's a flawed political document firmly embedded in the prejudices of its day (i.e. today) that's more pre-scientific taxonomy than science), but the short version: http://en.wikipedia.org/wiki/Insanity http://en.wikipedia.org/wiki/Insanity Insanity, craziness or madness is a spectrum of behaviors characterized by certain abnormal mental or behavioral patterns. Insanity may manifest as violations of societal norms...
- deleted 14y ago[deleted]
- ceejayoz 14y ago> By definition, insanity is doing the same thing over and over again expecting different results. No, that's a pithy quote attributed to Einstein. The actual definition of insanity is very different.
- svag 14y agoAs a single page http://www.wired.com/business/2013/03/ipo-man/all/ http://www.wired.com/business/2013/03/ipo-man/all/
- jcr 14y agoThe previous HN discussion mentioned in the article is here: http://news.ycombinator.com/item?id=723408 http://news.ycombinator.com/item?id=723408
- zavulon 14y agoI haven't had my tea yet this morning, so I'm a little slow.. This isn't real, right? There's no way this is real.. Right?
- theDoug 14y agoIt is real, there was also this piece[1] in The Atlantic earlier this month, and Mike's on the Today show this morning. I'm Doug Stewart[2] (mentioned in the interactive "Who Owns Mike Merrill?" graph). If anyone has questions, I'll try my best. [1]: http://www.theatlantic.com/magazine/archive/2013/04/putting-the-i-in-ipo/309255/ http://www.theatlantic.com/magazine/archive/2013/04/putting-... [2]: http://www.kmikeym.com/users/137 http://www.kmikeym.com/users/137
- deleted 14y ago[deleted]
- phpnode 14y agoJust curious, do you really make more money as a photographer than as a developer? Or is one firmly work and the other firmly hobby?
- waterlesscloud 14y agoOr perhaps both are work? He wouldn't be the first person in history to work two jobs when one paid more than the other.
- theDoug 14y agoExactly/thank you. They're complimentary, and like most things in life, one single thing can't really satisfy all our creative hopes/needs.
- theDoug 14y agoI have, but the one that pays best tends to be the one I'm more interested in (read: show more effort in). I'm more accustomed to photography but development is a lot more fun these days. If someone wanted to be only a wedding photographer there's almost no reason to not have a packed summer (demand seems _much_ higher than supply).
- yohann305 14y agoAt the frontiers of slavery. This guy is getting too much attention, he better have a great lawyer, troubles ahead.
- VexXtreme 14y agoI don't think this is about money at all. More likely than not it's some kind of sexual fantasy or something similar. No sane person would sell themselves for a couple thousand bucks like this just for the possibility of turning profit in the future.
- Samuel_Michon 14y ago“No sane person” You might be on to something...
- eli_gottlieb 14y agoHe's not insane, he's just ahead of the curve. I imagine this will be quite common in the near future, probably as a "logical" replacement for student loans within the system of neoliberal capitalism.
- Samuel_Michon 14y agoYou think in the future more people will sell their lives to the extent that they let others decide what to eat, what work to do, when to sleep, who to date and who not to date? That would mean we're going back in time. I found the article a fascinating read, but the more I think about it, the more I realize how very, very wrong this is. It reminds me of ‘We Live in Public’, the documentary about Josh Harris' experiments. http://www.capitalnewyork.com/article/media/2010/11/709256/singularities-josh-harris http://www.capitalnewyork.com/article/media/2010/11/709256/s...
- eli_gottlieb 14y agoYou think in the future more people will sell their lives to the extent that they let others decide what to eat, what work to do, when to sleep, who to date and who not to date? Of course. How else can they raise funding for the remaining few items they have any real initiative in?
- angersock 14y ago
- blablabla123 14y agoIt's quite funny, and a consequent move in a robotic system. We can all live like robots if we want, he is taking it seriously. At least on average, the more robotic you live your life, the more money you get. 9 to 7 instead of 9 to 5? Working on weekends? He is taking it to the extreme, he will be working 24/7. He is selling responsibility for his life for anyone giving enough money.
- iopuy 14y agoObviously this is a joke. Look at his sleeping excursion, it didn't work so he stopped. It's a fun cute thing to do but little beyond that. Does he have the same legal protections and obligations as a company? No. Would any of this hold up in a court of law?. No. Congratulations to the hacker news reader who got a comment in the paper. I also don't know what to make of the sentence about "fooling around" with that guy. Can some explain what I just read there?
- dubcanada 14y agoI think it's pretty obvious what you just read. But if you really need someone to explain it, you can read up about male + male sex on pretty much any search engine.
- Delmania 14y agoI suspect I'll get downvoted for this, but for some reason, I find this quote chilling, “Children are a financial drain,” Merrill wrote. “The time investment of raising a child is immense. The responsibility is epic. The impact on future projects would be drastic. In light of these factors, it makes sense to reduce the chances to nearly zero and have a vasectomy performed.” It seems to completely remove the joy and satisfaction that comes from raising children. Only a few things should be viewed from a financial lens. Wealth is not money, wealth is discretionary time.
- Pkeod 14y agoYMMV. Not everyone wants kids, plenty of people are already having kids, many people who do have kids regret it entirely, and many people correctly recognize that you can't live your dreams and raise your kids right. It's not just a financial lens for many people it's a time lens too. Having kids whose lives you very probably won't even be allowed to be a part of is a reality for many guys too. Even if you have kids in marriage the reality is you will probably get a divorce, the kids will go to the mother, and you will pay. Why risk it if you know you can avoid it? Having kids it's a guarantee of joy or satisfaction. Writing books, creating epic things can give just as much joy and satisfaction. 10 year at a time male birth control is coming so vasectomies will no longer be necessary. http://www.parsemusfoundation.org/vasalgel-home http://www.parsemusfoundation.org/vasalgel-home http://reddit.com/r/childfree http://reddit.com/r/childfree
- rayiner 14y agoThis is why India is ultimately destined to overtake the western world. Either directly or from within. Having had occasion to debate about this on /r/childfree, I feel like a lot of their arguments are based on one of the following fallacies: 1) That there are "too many people." That may be true in parts of Africa, but in the developed world, the positive economic contribution of each additional person still vastly outweights the cost of their incremental strain on natural resources. 2) That depopulation in the future doesn't affect people in the present. If you're thinking of investing in a startup, what does it do to your calculus if you know that your customer base won't be any bigger in 20 years than it is today, and will be older? 3) There is no positive externality to having kids. Your average person is going to contribute millions of dollars in labor and social value (how much would you pay to save the life of a loved one?) over his or her lifetime. 4) Failure to look at the value of alternatives in incremental terms. The question isn't: what is the value of having kids versus doing a startup, it's: how much does having kids reduce my probability of doing a startup, and what is the weighted value of that relative to having kids. 5) Failure to account for the correlation between parent-child incomes. I'd say 90% of the kids from my high-income suburban middle school are now making median or above incomes. Maybe 7-10% are in the top 1% of income for their age bracket. High income people create a larger positive externality when they have kids. 6) Failure to weight the value of alternatives by probabilities. Your average person has very few alternative courses of action that is going to generate as much economic value as raising kids. Your high income person has has a greater probability of doing these things, but writing a best-selling book or founding a successful startup is far from guaranteed. So the relevant question is not: what has higher external social value, doing a startup or having a kid, but rather which of those has higher social value weighted by the probabilities that your startup will have any real success (low), or by the probability that your kid will achieve at least median economic success (quite high). This is of course not to argue with anyone who chooses not to have kids. Nobody needs to justify personal decisions like that. But to the extent that they do try to justify it (and that's largely what /r/childfree is--people who feel the need to justify their decision), it's useful not to rely on fallacious reasoning to do so.
- daSn0wie 14y agoI think it's a great idea. I feel like I commonly give advice to people, but not knowing what else is going on in the person's life. Also, the outcome of my advice usually doesn't have a direct effect on me. At least a bad decision (or multiple bad decisions) have a financial impact on the stock performance and/or the willingness of the company to continue to participate.
- PaulHoule 14y agoI think the amount of money involved is shockingly small. To get some idea of what the present-time value of a person's work is, if you make $50,000 a year and work for 20 years, you make $1M in that period of time. He could make the $100,000 by working another 4 hours a week over the next 20 years and not need the $1K. I mean, my wife and I regularly make small business investments in our activities of up to $500 without ever asking each other. We'd usually ask each other if it's more than that. This guy is having to talk to a committee just to make a $90 investment that's just nuts. But I guess it's just a matter of time before cargo cult investing gets celebrated in Tired magazine.
- redblacktree 14y agoYeah, it seems that he undersold on the IPO. I guess investors were nervous about a new asset class.
- Pwnguinz 14y ago"You make $1mm in 20 years", or "You make whatever is left after taxes & expenses"? The latter, clearly :). Anyways, the point was well taken; he did undersell his IPO. Newcomers on the block will surely learn from him and offer shares for more inflated prices ;). In fact, his IPO earned him a pittance <$1k (nine-hundred and something shares sold to 'friends and family').
- maxent 14y agoThe idea of selling equity in oneself is the topic of a great book (written in 2000) called "Future Wealth" by Chris Meyer and Stan Davis: http://www.amazon.com/Future-Wealth-Stan-Davis/dp/1565113942 http://www.amazon.com/Future-Wealth-Stan-Davis/dp/1565113942 David Bowie sold bonds backed by his IP in 1997: https://en.wikipedia.org/wiki/Celebrity_bond https://en.wikipedia.org/wiki/Celebrity_bond The book talks about equity being a logical next step and about the value of being able to diversify and distribute risk. I think there is definitely one possible future where this is very common. It probably starts with athletes and celebrities - as you can see, this guy has gotten a terrible valuation (for several reasons). For years, I have been talking myself out of starting a company that serves as an exchange for people selling equity in themselves. It is inevitable that someone tries this because the crowd-funding industry is so sexy. It will be an interesting experiment, but I'm not sure the effects on society will be net desirable. At its best, it would give people the ability to sell a fraction of themselves for some up-front cash and give them the ability to take bigger risks in the projects they do. Anyway, if you want to talk more about this, hit me up.
- RyanMcGreal 14y agoThere are a number of relationship types in human interactions: family/communality, reciprocity, and dominance. At a minimum, any attempt to expand one relationship type (in this case, reciprocity) to encompass an entire life can be expected to entail high levels of awkwardness - the feeling a person gets when they realize their understanding of a relationship type with someone else is different from that other person's understanding. The evidence also indicates that when the norms of reciprocity are imposed on erstwhile communal relations, the reciprocity paradigm consumes the communality paradigm and the relationship changes from communal to reciprocal. In effect, turning your entire life into a market transaction makes communal/familial relations impossible. For most people, I can't imagine this would be conducive to good mental and emotional health. (Presumably, psychopaths won't have a problem with it.)
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- alexgrande 14y agoThat is _so_ Portland.
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- gamblor956 14y agoI think someone took The Unincorporated Man a little too seriously. The reason that we don't allow people to sell shares in themselves is because it will inevitably result in indentured servitude, or even de facto slavery.