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[P]
Can An Individual Go Public?

By owillis in Media
Wed Mar 07, 2001 at 10:07:19 PM EST
Tags: Culture (all tags)
Culture

True Human Capital

Why do people invest in stocks? You are loaning a company your money temporarily in exchange for a return on your investment in the form of dividends. The more successful a company is, or is perceived to be -- the more in demand a piece of that company is -- that's why stock prices jump up and down. Simple supply and demand.


When you invest in a company, you're sometimes investing in a brand name. People buy Coke, McDonald's, Pepsi, because they know those companies -- they have a personal relationship with the brand and they figure that if they and all their neighbors use it, it will be successful and they'd like a part of that.

But investors also invest in personality. People bought shares in Martha Stewart Omnimedia because they believe in the savvy of Martha Stewart, they buy WWF based strongly on the omnipresent Vince McMahon (who isn't the CEO, his wife is) and so on.

Why bother with the company?

Why couldn't you just invest in Martha Stewart -- The Person?

Let's say Martha issues 1 million shares. Of that, she issues 10% to the public at large (100,000 shares). At the end of each calendar year, Martha distributes her earnings among all those shares in the form of dividends.

Now say I believe Martha has the potential to make millions over the next few years, so I want it now -- when it's cheap. And so do others. Demand outstrips supply, and people are willing to spend more for a piece of Martha. So the stock goes up, and up.

These shares now become currency for Martha. She can use this capital to sell and reap cash benefits, trade in exchange for material things, whatever. But she has an obligation to do something that will increase her net worth, for the good of herself and her "shareholders".

Crazy?

Now. Say there's an artist. He's got nothing like the cash flow of a Martha Stewart. But he makes really awesome stuff. So you buy his stock, you tell your friends to buy his stock -- and it takes off. Now he's able to have currency to live and make his art. Your dividend? The art.

Now I've only described a bull market, and haven't gone into the more sinister elements of a Human-based Stock Exchange. But I think it's something to think about, perhaps to implement...

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Can An Individual Go Public? | 46 comments (43 topical, 3 editorial, 0 hidden)
Interesting, but a possible problem... (4.10 / 10) (#1)
by Electric Angst on Tue Mar 06, 2001 at 05:45:02 PM EST

If I'm not mistaken, wouldn't this be a form of slavery?

I mean, isn't one of the benifits of buying stock that you have some amount of say in what the company does? What happens when you can do that to a human being because of this stock exchange idea? (For example, what would happen if Viacom were to initiate a hostile takeover of the artist you mentioned, and then used their controlling share of his or her stock to use them as a cheap designer for MTV?)


--
"Hell, at least [Mailbox Pipebombing suspect Lucas Helder's] argument makes sense, which is more than I can say for the vast majority of people." - trhurler
Yes! (4.25 / 4) (#4)
by Mr. Excitement on Tue Mar 06, 2001 at 06:00:40 PM EST

It'd royally suck to have to hold a board meeting every time you want to piss.

Now, the question remains: in a free society, in which the individual has complete ownership of his own life (hypothetically speaking), should a person be allowed to sell himself into slavery?

You can already sign away your rights in contracts (as is your right), where is the line drawn?

I suppose that the law (in such a hypothetical society) would have to recognize children's rights to establish their independence of their parents (i.e., no longer their parents quasi-property), to ensure that nobody is born into slavery without the right to reject it.

1 141900 Mr. Excitement-Bar-Hum-Mal-Cha died in The Gnomish Mines on level 10 [max 12]. Killed by a bolt of lightning - [129]
[ Parent ]

Limitations (none / 0) (#11)
by owillis on Tue Mar 06, 2001 at 07:50:36 PM EST

I thought of including a clause in this system where someone could not "IPO" until they turned 18. Not to say there wouldn't be some pre-18 preening and dealing in order to assure stock options.
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
Not quite (3.00 / 1) (#19)
by Mr. Excitement on Wed Mar 07, 2001 at 01:50:13 AM EST

What I had in mind is, a child should not be considered the parents "property" if he doesn't so desire. If a child recognizes his own independence, and realizes conditions suck due to his parents' actions (or inaction), then he should be free to establish his independence by striking out on his own, willfully severing all financial ties and legal obligations that normally follow from a parents-child relationship.

This also has the effect of insuring that if you are born to parents who "sold" themselves, you aren't stuck in the same situation.

1 141900 Mr. Excitement-Bar-Hum-Mal-Cha died in The Gnomish Mines on level 10 [max 12]. Killed by a bolt of lightning - [129]
[ Parent ]

By what right!? (3.00 / 1) (#13)
by traphicone on Tue Mar 06, 2001 at 08:28:35 PM EST

You can already sign away your rights in contracts (as is your right)...

Now... what if you could sign away your right to sign away your rights? If so... then you could enter into all sorts of fun contracts and agreements.

Kind of reminds me of the episode of the Simpsons where Homer sold his soul to Satan (for a donut, I think). Turns out he legally gave his soul to Marge years before, and that the contract was therefore invalidated. Satan, being frustrated turned Homer's head into a donut ("Let that ill-gotten donut be forever on your head!"). Homer had more donut than he'd ever even wanted.

It's got possibilities, I'm telling you....

"Generally it's a bad idea to try to correct someone's worldview if you want to remain on good terms with them, no matter how skewed it may be." --Delirium
[ Parent ]

Bad idea... (3.00 / 1) (#20)
by Mr. Excitement on Wed Mar 07, 2001 at 01:54:30 AM EST

If you sign away your right to sign away your rights, and then sign such contracts anyway, then you're liable for breach of contract, and you'd be liable for fraud against whomever you've entered into a new contract with.

Not a pretty picture.

1 141900 Mr. Excitement-Bar-Hum-Mal-Cha died in The Gnomish Mines on level 10 [max 12]. Killed by a bolt of lightning - [129]
[ Parent ]

hmmm (4.00 / 1) (#25)
by Mabb on Wed Mar 07, 2001 at 10:32:26 AM EST

You can already sign away your rights in contracts (as is your right), where is the line drawn?

I don't think, even in the US, that you can contract out of the law. That's certainly the case in Australia, and I seem to remember a story about post-employment non-compete clauses that were illegal in certain US states, being unenforceable even if the employee had signed the contract.



QuiltBlog: WIP, SEX, WOW, MQ, LQS, HST...

[ Parent ]

children / contracts (4.00 / 1) (#35)
by djabji on Wed Mar 07, 2001 at 04:55:37 PM EST

In Canada, when a child turns 18, (s)he can terminate any contract that (s)he is bound by.

This is a one time offer, valid only at the comming of age.

It is designed, so that children can enter into contracts (with the consent of their parents), but when they become independant of their parents, they are able to break free from the contracts that their parents coerced them into.

So if Britney Spears signed her 10 year recording contract at the age of 17 under Canadian law, she could have broken off her deal with the recording company when she turned 18 and sold herself off to the highest bidder (she was popular by then).

This would mean that if stocks were sold in a child, they could all be voided at the age of 18.

So if you wanted to invest in a child prodigy, you would know that your investment would only last until his 18th birthday. The value of his stock would naturally adjust accordingly.

A few more stock expiration dates would likely be handy.

18 or 21) comming of age date - break free from sales made while you were a minor.

60) retirement date - so that you can actually retire on your earnings instead of having to give half your money to your shareholders.

Death) What happens when the person dies? Does his estate get divided among his shareholders, or his family?

[ Parent ]
Possibly... (3.33 / 3) (#5)
by owillis on Tue Mar 06, 2001 at 06:07:24 PM EST

I was thinking you could institute controls where the individual always has a controlling interest in their life. Outside control would be limited to influence, so the stock fluctuates based on overall belief in your goals and the path you take.
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
Some Fun Possibilities (4.75 / 4) (#12)
by HypoLuxa on Tue Mar 06, 2001 at 08:11:37 PM EST

If you look at what shareholders can do to corporations, you get some unusual possible ramifications:
  • You can be replaced with new management if you aren't doing well
  • You could be merged with another person
  • You could issue tracking stocks for hobbies or side projects
  • You could be delisted
  • If you declare bankruptcy, the shareholders could decide since your NAME has certain mindshare in the community and it is still a valuable corporate asset, it could be auctioned off.


  • --
    I'm guided by the beauty of our weapons.
    - Leonard Cohen
    [ Parent ]
Fun (3.00 / 1) (#28)
by Ceebs on Wed Mar 07, 2001 at 10:45:16 AM EST

If you declare bankruptcy, the shareholders could decide since your NAME has certain mindshare in the community and it is still a valuable corporate asset, it could be auctioned off.

I like this idea. Wait for some film star's carrer to be reduced to nothing, Buy his Identity. Wait for the Inevitable revival when the recording industry brings out a new format. then as If by magic, you are the Star without any of the work.

[ Parent ]
In some ways this is already done... (4.40 / 5) (#2)
by HomeySmurf on Tue Mar 06, 2001 at 05:46:55 PM EST

...people take out personal loans all the time. What you are talking about is basically the rationale behind it. Student loans and credit cards given to students are something very similar. Someone gives money to a poor person (often a high school student with no credit) because there is potential of great earnings there if the person goes to college.

The other thing is that an individual can create a corporation that has only employee (themself) and sell that stock. Many start-ups are really just one person and their idea. Investors are really investing in that person and whether or not they are going to be able to follow through on their idea.


"Politics is for the moment, an equation lasts eternity." -A. Einstein
Bowie has .. (4.00 / 5) (#3)
by digger on Tue Mar 06, 2001 at 05:47:52 PM EST

You say: Why bother with the company? Why couldn't you just invest in Martha Stewart - The Person?

I believe that David Bowie has in fact done this but the only link I could find on the web was this. Unfortunately, all it says is [Bowie] ... has allowed people to essentially purchase shares of himself with Bowie Bonds.



| optimisation precludes evolution |
More Info on Bowie (4.50 / 4) (#10)
by owillis on Tue Mar 06, 2001 at 07:47:27 PM EST

Here's some more on the sale. Seems its tied to royalties from old recordings, I'd like a system investing in the future (like the stock market).
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
Bowie Bonds (4.00 / 1) (#27)
by Mabb on Wed Mar 07, 2001 at 10:37:54 AM EST

Actually, these are like futures. You get a return based on his royalties, so you're not investing in him per se, but his ability to make records that sell (in the future).


QuiltBlog: WIP, SEX, WOW, MQ, LQS, HST...

[ Parent ]
Do not buy Martha Stewart shares!! (2.10 / 10) (#6)
by Pac on Tue Mar 06, 2001 at 06:15:04 PM EST

Everybody knows her future does not look very promissing.

You may also want to take a look at The Street Performer Protocol (although Signal 11 seems to find it strange to actually read something from Bruce Schneier). The protocol describes how something like you are suggesting might work in the real world.

Evolution doesn't take prisoners


Ahem. (2.33 / 9) (#8)
by Signal 11 on Tue Mar 06, 2001 at 06:19:53 PM EST

Please stop putting words in my mouth. If you had actually READ The Road Ahead, you would KNOW I'm right!


--
Society needs therapy. It's having
trouble accepting itself.
[ Parent ]
You sound like Katz (2.42 / 7) (#9)
by Pac on Tue Mar 06, 2001 at 06:36:06 PM EST

Obviously, your conservative views are blurring your eyes. If you are going to make claims about something, at least read about it before posting. Everyboby, and I mean even my sister's cat, knows that "Snow Crash" and the lesser known "The DotCom Crazy in a Small Ohio village: A socio-biological approach" completely refute "The Road Ahead" down to the last comma.

Evolution doesn't take prisoners


[ Parent ]
You sound like Taco (1.66 / 6) (#14)
by Signal 11 on Tue Mar 06, 2001 at 08:57:25 PM EST

I mean, your dismissive phrases, your spelling mistakes. You're quite good at arguing, unhindered by the facts though you may be. I mean, everybody knows you're just a wannabe troll. Had you even read The SpiralX Trolling-HOWTO (revision 3) you would have called me Bojay and made a veiled reference to my sexual orientation (possibly by pulling in random one-line quotes from my diary entry and comments) as well as more judicious use of buzzwords like "socially maladjusted". Some troll you are!

51g|\|a1 11 \/\/i11 0\/\/n j00 k-rad k4rm4!


--
Society needs therapy. It's having
trouble accepting itself.
[ Parent ]

Why bother? (3.75 / 4) (#16)
by spacejack on Tue Mar 06, 2001 at 11:10:07 PM EST

Currently artists, etc. sell what they've done. Why would you rather pay them for something they might or might not do?

Furthermore, you can already fund someone you think has potential; it's called venture capital or an advance. It would be pretty hard scraping up venture capital without any potential return on investment. Throwing around the sales figures of Britney Spears, or Blair Witch, or Myst, etc. can often lure investors, regardless of your real-world chances of a return.

Additionally, artists can apply for grants, provided they're doing something a selection jury wants.

Valid points (3.00 / 1) (#18)
by owillis on Tue Mar 06, 2001 at 11:43:34 PM EST

My theory is that there is no formalized system for one-to-one venture capital. Currently the power is held by a priveleged, well-capitalized few. What I'm saying is to open the funding and investing process to everyone. Grants for artists come with strings attached, and a limited pool of funding...
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
well (3.00 / 1) (#33)
by spacejack on Wed Mar 07, 2001 at 03:35:16 PM EST

it's an intersting idea and a bit fun to think about. :) I do think however you'd have massive problems of ego and laziness.. an artist that suddenly saw their shares rise due to the popularity of a song or book or something they did would probably tend to take the money and run, or gamble/drink/snort/smoke themselves into oblivion :)

In the end, I don't think it's a heck of a lot different than the systems we've got in place now.. except they've been massaged to ensure the investors don't get screwed by flakes :)

But if you think you can pull it off, by all means go for it :)

[ Parent ]
Not the smartest idea. (4.33 / 3) (#17)
by Jin Wicked on Tue Mar 06, 2001 at 11:40:43 PM EST

You haven't bought much artwork, have you?

Never, ever pay an artist ahead of time for work before it's finished...otherwise you will be procrastinated into the grave. Pay commissions only partially up front. Every artist I've ever known is guilty of it (many were well-known professionals), I swore I wouldn't do it, but it happens. As soon as the money's there -- poof! Didn't I have about 30,000 other things I need to do?

And never utter the phrase: "Take your time." Make it sound like you are going to commit suicide if you don't have your picture by a certain time.

It's not intentional, it's just genetic or something.

Maybe because the money tends to disappear as soon as we get it. Those paints are expensive, you know. :(

Only pay up front for the stuff you know for sure is finished. That's the only way to do it. Unless you just really like the artist and just want to help them out.


This post was probably not written by the real Jin Wicked. Please see user "butter pie" for Jin's actual posts.


been done as a way for kids to get to college (3.00 / 3) (#21)
by mkc on Wed Mar 07, 2001 at 06:05:42 AM EST

I recall hearing, maybe on NPR, about a program that did something like this for high school kids wanting to get to college. They'd sell shares in themselves (meaning their earnings at some future time). So, you give them $1000 and get a certain percentage of their earnings at 30 or something. It was a moral rather than a legal deal, but a pretty good idea, I thought.
-- Teach a man to fish and he will eat for a day. Give him a patent on fishing and he can enjoy watching everyone else starve every day.
numbers don't add up (4.50 / 2) (#22)
by streetlawyer on Wed Mar 07, 2001 at 06:06:06 AM EST

Hmmmm .... yeah, but think about the scale. Issuing shares is a business with high fixed costs -- a dividend cheque is the same piece of paper whether it's for one dollar or a million. And why is the market going to value your human capital more than you? (which is what would have to be the case, if you're going to sell, pay the transactions costs and come out ahead). It might be feasible for David Bowie (although he did *not* actually issue stock; he borrowed on the bond market, against the income stream of his royalties).

In fact, the closest you can get to this is the situation in which a talented young musician wants to devote herself full-time to her art, and therefore asks someone to provide finance now in return for an equity stake in the profits of her future recordings. A venture capitalist takes the risk on board (figuring that one act in a hundred will hit it big and pay for the other 99), and puts up the money. The woman turns into Courtney Love, makes a few million herself, the venture capitalist (Sony Records, I believe) gets much richer because he bought the majority stake in her human capital, and then, in the real world, Courtney starts whining like a fishwife about it being all so terribly unfair, and everyone uses it as an excuse to steal tunes from Napster. But by now I get the suspicion that I may be trolling .....

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever

another thing (3.00 / 1) (#23)
by axxeman on Wed Mar 07, 2001 at 07:15:07 AM EST

People, unlike corporations, invariably depreciate over time :P... Altho copyright, patent etc laws are designed to prevent this...

Also, think of the impact on inheritance etc... If the person dies bankrupt, will you have to pay part of the burial?

Being or not being married isn't going to stop bestiality or incest. --- FlightTest

Creepier thought... (2.00 / 1) (#24)
by Malk-a-mite on Wed Mar 07, 2001 at 10:32:10 AM EST

"If the person dies bankrupt..."

Can we, the shareholders, sell the organs to recoup our investments?
This is going somewhere I don't want to be...

[ Parent ]

Venture Capital For Your Life (2.50 / 2) (#26)
by brainrain on Wed Mar 07, 2001 at 10:36:32 AM EST

Pros: I think what you've come up with is a very *cool* idea and has a lot of potential.

Cons: I don't think this would become common currency for the reason that people may be broke/homeless/jobless and their "currency" would be totally useless. No one would want to buy stock in Joe Schmoe the homeless guy around the corner. In fact, he will never have a very good chance of every improving his financial position. People don't want to buy his "currency" so he will never be able to make money to get off on the right foot.

Implementing something like this would create definite middle, lower and higher classes. The middle class having their "currency" purchased by their place of business. Whenever you would become employed by a business, they would agree to purchase a set number of shares in your stock every year. When you receive a "raise," they would then agree to purchase more of your stock. (A very cool idea.) Unfortunately for the lower classes on "welfare" the government would have to purchase a set number of your "currency" to give you some working money. The higher class, on the other hand, would have a plethora of stock, being purchased by who knows who and being sold at huge prices. Think of it as venture capital for your life!

Another problem: How would you buy anything? You'll need a full stock check every time you purchase a loaf of bread. That could get ugly.

On a lighter note, it takes the meaning of "Do you want a piece of me?" to a whole new level.

--
Kleptotherapy - Helping those who help themselves
High Risk (3.00 / 1) (#32)
by owillis on Wed Mar 07, 2001 at 12:45:01 PM EST

I think the broke/homeless/jobless could be helped by this idea - much like a risky stock investment. If they laid out a plan for how they would use your capital and convinced someone to make the investment in them, it could pay off for both parties. The investor would be able to purchase at a discount, and the "investment" would have capital to pull him/herself out of a hole. I was also thinking groups of people could band together as a group investment, sort of a collective type thing.
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
Could Easily Lead To Bankruptcy, Personal Collapse (5.00 / 4) (#29)
by lucas on Wed Mar 07, 2001 at 11:26:38 AM EST

In the US, you create a corporation so that, in case you cannot repay creditors, the corporation dies but your personal assets are protected. The assets of the stockholders are protected.

Corporations have a "veil" that shouldn't be pierced. If it is pierced by your sloppiness (e.g., you commingle assets of the corp with your personal assets), then the courts will likely judge against you and your personal assets will be taken from you. If you issued stock from yourself, your stockholders could therefore auction off everything you own to pay the debts and then take the rest for themselves.

How about a hostile takeover scenario? Someone gives you an incredible amount of money through buying up stock (too much) . How would you increase your earning potential to meet this? Would you spend their money to invest in your art or craft and risk them potentially withdrawing their money and leaving you bankrupt?

Issuing stock on oneself is nothing short of foolish, since people would be gambling on how believable you are and you could perceivably lose everything you own. You might be an artist who creates items which are popular for a while and then fade (e.g., fetishes or trends), but what would additional capital allow you to do in the long-term?

Let's say you're caught with particularly deviant pr0n on your box (e.g., I'm thinking of the once-popular Harvard Divinity School President, Ronald Thiemann) and it's in the media. People will take their money out, if it's severe enough, because they will know that your work will not be popular. In a corp, you can fire or ask the offending person to resign and save your company... there's no one to take the heat for you and you are by yourself.

You would be judged, thus, on peoples' perceptions of you. How would you convince people that you would be making more? What would Martha Stewart say, aside from talking about her corporation and expanding into new markets, etc. There is no objective, tangible way to tell. People like her don't need the money, anyway -- unless she is going to buy a large plane or yacht or something.

Short-term investments work on rumor and speculation. Screwing around with an individual as if they were a commodity seems to me a short term money-making scheme that would have devastating long-term results.

A Gamble (2.00 / 1) (#31)
by owillis on Wed Mar 07, 2001 at 12:41:11 PM EST

I think society already gambles on people. We invest money in education so that one day we hope you become a productive member of society. If someone drops out, its not just their loss - its wasted money. It's all a risk. If someone drove up your stock price, my impression would be that they want you to use that currency to improve your earnings flow - whether that means creating art, or re-investing that cash - whatever. Your ability to create wealth is what is being invested in.
-- Oliver Willis
An Operative with an Agenda
[ Parent ]
Brings a whole new meaning to the phrase (1.00 / 2) (#30)
by GreenCrackBaby on Wed Mar 07, 2001 at 11:56:01 AM EST

"Hostile Takeover"

"Dance my puppets, dance."

Already been done (5.00 / 2) (#34)
by galen on Wed Mar 07, 2001 at 04:07:51 PM EST

In fact, the comedy team of Gilbert and Sullivan lampooned the Limited Liability Act in their comic opera "The Gondoliers", written in the late 19th Century.

One of the characters in the story is the Duke of Plaza-Toro, who incorporates himself and sells shares. Later on in the second act he dodges hordes of creditors by seeking legal protection.


Time flies like an arrow. Time arrows with a stopwatch.

Legality (none / 0) (#37)
by owillis on Thu Mar 08, 2001 at 03:14:51 AM EST

Anyone have pointers to how to set up an exchange like this legally?
-- Oliver Willis
An Operative with an Agenda
Just what the world needs... (none / 0) (#38)
by insomnia on Thu Mar 08, 2001 at 07:38:04 AM EST

more penny stocks.

~~~~~~~~~~~~~~~~~~~~
'cause I said so, that's why!

You can already do this. (3.00 / 1) (#39)
by Alik on Thu Mar 08, 2001 at 07:44:03 AM EST

The minimum number of people in a corporation is one. Many consultants and speakers have set up personal private corporations in order to hold the funds from their business. I know an industrial designer who's explained to me that he *has* to incorporate, because if he didn't, he personally would get sued if somebody did something like smashing their baby over the head with one of his designs.

Furthermore, once you've got a legal corporation, you can try to file paperwork for an IPO anytime. The problem isn't the law; it's that the SEC and the underwriters are going to laugh in your face, because the amount of money most individuals are going to earn just isn't enough for those guys to bother.

Now, I believe there are rules which let you sell shares in a business without going through the SEC and the standard exchanges. However, these are beyond the scope of my knowledge. If you're truly interested, go find a lawyer who specializes in finance.

yeah (none / 0) (#40)
by Rainy on Fri Mar 09, 2001 at 03:28:37 AM EST

An individual can go public - he just has to start a company and hire no employers. This company will be just 'him'. Painters etc usually don't do it because if someone likes their work, a more direct way to help them is to *buy* one of his/her paintings.
--
Rainy "Collect all zero" Day
Some thoughts (5.00 / 1) (#41)
by jck2000 on Sun Mar 11, 2001 at 12:05:11 AM EST

Business entities issue two general types of securities: (i) equity securities (stock), which are rights to receive a share of the profits of the business (that is, no obligation to pay a specific amount, but a share in the risk), and (ii) debt securities (notes or bonds), which are rights to receive payment of a specified amount of principal and interest (that is, an obligation to pay, but no share in the risk (except for risk of bankruptcy)).

While it is not rare for an individual to issue a note (for instance, when an individual borrows money from a bank, he generally has to sign a note), equity interests are less common when applied to individuals -- though, one can think of some examples: (i) divorce settlements, whereby one party has to pay a specified percentage of his or her income to the other, (ii) performing artist.manageial contracts and (iii) commission arrangements. Additionally, as others have pointed out, it would not be too difficult to form a corporation that employed a single person, who was contractually obligated to perform certain services for it, and then sell equity interests in such corporation. All such arrangements, however, are private (that is, they do not involve SEC-registered securities). This is due to the fact that (i) the amount of profit that an individual can be expected to generate is generally small compared to the size of a company appropriate for SEC registration (by which I mean cost-effective; it should be noted that the SEC does not have a size or quality criteria -- its main concern is that risks are adequately disclosed) and (ii) dependence on an individual makes a venture very risky, as he or she could die, get sick, become disenchanted with the project, etc.

On the other hand, in the recent tech boom, many companies, though having multiple employees, were able to get funding based on the qualifications or potential of a single "key man". I would guess that Ray Ozzie's latest company is probably an example of this. In a sense, the securities of such companies could be regarded as intersts in an individual.

A technically interesting question is whether any individual has even been a registrant on an SEC registration statement for debt securities. This could arise where, for instance, a very rich main shareholder of a company guaranteed the company's bonds. The prospectus for such an offering would probably have to contact audited financial statements for the individual.

You know what? (none / 0) (#42)
by NNland on Sun Mar 11, 2001 at 01:11:21 PM EST

I had actually thought about doing this.

Not stock per se, but an idea very similar.
I was thinking of selling some percentage of my gross income over 10 years after I graduated college. Selling like a percent for 1k or so, to help fund my way through college. It would be VERY good for people to invest in me, you figure around 50k/year for a comp sci major, that's 500/year, for 10 years, IE your 1k investment gets you 5k. Isn't that nice?

Yeah.

About the only thing that stopped me was that I was too lazy to offer myself up like that...As well as the fact that 1k...I need like 5k/year during school to be able to function, leaving me with having to pay 20% of my income for 10 years after I graduate. That's not a good idea.

I suppose I could have fanagled the numbers to make it decent for both me and investors...but I'm lazy, and I've only got one year left of college anyhow.

*shrug*
Ah well...

risky? (none / 0) (#43)
by acronos on Tue Mar 20, 2001 at 04:50:00 PM EST

1) you might die
2) you might not graduate
3) you might not be any good and get fired alot.

Still, it would be about a 18%/year return on my investment. Some might consider it. Like you said, you would have a hard time graduating college with just $1000 unless you got a whole lot of scholarships.

Another thought, Student loans work essentially the same way. You would be paying out a portion of your pay check after you graduate. It would probably be much less than 10% of your income if you only had $1000 in loans. Silly you.


[ Parent ]
Ahh... (none / 0) (#46)
by NNland on Mon Aug 27, 2001 at 12:05:41 AM EST

1, 2, and 3 are all valid possibilities.

But as an option, I could create a corporation, get small independant investors as before, and I would be running an investment business. There would be tax benefits, I would get experience, and I could buy insurance to cover both the investors and myself in case of a mishap.

I do understand the concept of student loans, for by the time I graduate, I will have taken out around $22k in them. The difference between the corporation and the student loans...if any of the 1, 2, or 3 happens, my cosigner (my parents), get slapped with the bill. Shit, maybe for those people who actually have a future, becoming an investment opportunity for small investors, instead of a loan opportunity for a bank, would be a viable option.
- NNland

[ Parent ]
A lot like Loans (none / 0) (#44)
by compmajor on Sun Apr 01, 2001 at 11:40:21 PM EST

This is very similar to a loan. Someone gives you money in exchange for profits/payment you will give back to them later... and you want the "stock" of the person you give the money to to go up, so they can pay you back. Guess we already are exchange human stocks...

The film artist's dilemma. (none / 0) (#45)
by Mintaka on Sun Apr 22, 2001 at 04:40:55 AM EST

Okay, here's my rant for this article.

I'm a filmmaker (film student). Film is probably the most expensive art medium out there; doing an absolutely-cheapest-budget 5-minute short for an art class is costing me a few hundred dollars, and I'm not even paying to rent the camera or lighting since it comes out of my tuition.

This is expensive as hell to work in.

Investing in a person is kind of wierd, since there's no guarantee the person will make money, but investing in a film is similar. Now, how do I get money for my next film? I'm wanting to do a feature film that's very heavily political; in fact, it might be something the K5 community likes.

Let's say I dub this a K5-friendly movie and ask K5 people to invest in it. They buy a share of the movie before it's made, that money is used to make the movie, and they get a share of the box office return when/if it starts making money.

This doesn't sound too promising for someone who's never done a feature before. I mean, I admittedly have no experience beyond a few short films and working in television.

But, here's where this post comes in, what if I put myself up as collateral? What if I said that if the movie fell through, that that share turned into a share of me and that a chunk of any money I make goes back to the shareholders until they at least get their money back? How many people would be interested in investing then?

Of course, I'm talking about raising something on the order of a half-million dollars for a feature. A thousand shares, that's $500 a share; ten thousand shares, that's $50 a share. Would anyone take up something like this?

Can An Individual Go Public? | 46 comments (43 topical, 3 editorial, 0 hidden)
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