
19 year old files S1 (IPO prospectus) to raise $12,500 for his beer pong company - ai09
http://sec.gov/Archives/edgar/data/1487659/000125529410000212/mainbody.htm
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grellas
I 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.

~~~
irrelative
What seems like a parody to you, seems like a pretty clever hack to me. The
novelty of the making a beer pong company seems like the ultimate slap in the
face to other public companies worrying about SOX compliance and such. I bet
they make a lot of money from people willing to laugh at the idea and support
their idea.

~~~
jrockway
Reminds me of the homeless guys whose pitch is something like "I don't want
money for food, I just want to buy beer". They expect the honesty to work, but
personally, I think that if you want to get wasted on beer, you should get a
job. So while the pitch is unique and honest, they aren't getting any of _my_
money.

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jackowayed
Attempt 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
Not 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
Well, that being said, it's a growing market and the winner may not take all,
but they will take a large chunk.

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zach
Wow. 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>

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JacobAldridge
Brilliant. I assumed Finance Major at UNLV but he seems more rodeo champ -
<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
Oh man, nice find, how did you get his myspace? Someone needs to document this
story.

~~~
JacobAldridge
I 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
Brilliant. I'll work up a blog post for giggle's sake. More to come.

------
barnaby
Cool, 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?

~~~
reynolds
IPOs are underwritten by investment banks. Filing to go public without being
underwritten is called a direct public offering I believe.

~~~
bryanh
Granted, a direct public offering is very rare. Not unheard of, but rare
indeed.

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jmount
Probably he then sells to some other company that wants to be publicly listed
without filing its own IPO. Its an old scam.

~~~
jmount
its -> it's (sorry)

------
coryl
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?

~~~
anamax
> 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
I 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.

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raheemm
Someone should tell him about kickstarter

~~~
aditya
Would you fund his "art" on kickstarter?

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davidu
The 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.

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mikecane
So, is anyone here wondering if they could do this for a software idea they
have?

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rjett
So how much is this filing likely costing this kid (lawyers fees + filing
fees)?

~~~
brianr
From the section near the end, looks like $9,700.90

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ovi256
Funniest S1 filling ever. Just have a look at the Risk Factors section.

~~~
mritun
"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?

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coryl
lol, 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
I 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
Wow, $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
But not his money, after all it is a _public_ offering.

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mml
Yeah. 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.

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mkramlich
an IPO for beer pong? he better be Sarbanes-Oxley compliant

~~~
tlrobinson
Is sarbox _such_ a burden that it would be difficult for a simple one person
company to comply?

~~~
anamax
> 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.

