19 year old files S1 (IPO prospectus) to raise $12,500 for his beer pong company

[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.

[DenisM]

Still 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?

[bryanh]

Love it. Interestingly enough there is a (somewhat useless) discussion on Reddit (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".

[sublemonic]

Why is the best-case $2,300? The stock could sell for any price if it's offered.

[dpapathanasiou]

And in the late 90s, investment banks would be taking this out on roadshows.

[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.

[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

[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.

[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.

[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]

Doubtful, 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?

[raheemm]

Someone should tell him about kickstarter

[aditya]

Would you fund his "art" on kickstarter?

[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.

[mikecane]

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

[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

[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?

[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.

[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.

[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?