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The Questionable Line Between Crowdfunding And An Illegal Securities Offer; The Pabst Brewing Case Study
from the this-won't-last dept
We're certainly among those interested in various "crowdfunding" options out there for various business models, but the ones that seem to work are situations where people are buying something specific for their money, rather than buying "ownership" in a product or company. Once you're trying to sell ownership, you're basically offering equity, and I would imagine that's a huge no-no to the folks at the SEC who very, very, very carefully regulate any sort of equity offer. Mark Glaser points us to the fact that two ad agencies, upon hearing that the Pabst Brewing Company was up for sale decided to set up a website called Buy A Beer Company, with the goal of getting people to pledge a bunch of money that could be used to buy Pabst.
The website has the typical "tiered" options that we've seen from other crowdfunding offers (though, what you get at each level isn't clearly explained). I'm assuming that this is something of a PR stunt by those ad firms, but I'm wondering if they may run into some serious legal problems pretty quickly. They're basically offering unregistered securities in another company without having gone through any of the rather strict legal process required to make any sort of investment offer of this nature. Even if it is just a joke, it seems like the kind of joke that could end up with people in court.
The website has the typical "tiered" options that we've seen from other crowdfunding offers (though, what you get at each level isn't clearly explained). I'm assuming that this is something of a PR stunt by those ad firms, but I'm wondering if they may run into some serious legal problems pretty quickly. They're basically offering unregistered securities in another company without having gone through any of the rather strict legal process required to make any sort of investment offer of this nature. Even if it is just a joke, it seems like the kind of joke that could end up with people in court.
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I think this is probably a joke though. I don't see how they could actually make it work.
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The real question is...
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Re: The real question is...
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You Get Nothing
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Re:
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Re:
You beat me to it! Damn...
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Meh
If they were accepting actual money, and if they were promising partial ownership in return for that money, and if they didn't screen for "sophisticated investors" first, then there might be something to see here.
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Re: Re:
http://www.youtube.com/watch?v=_jdt36HySBs
Side Note: Ceann has done a great job at connecting with fans, including trips to Ireland with the band (they're an Irish-American band). From what I can tell, they make most of their money touring and selling CDs, shirts, etc...
http://www.ceannmusic.com/
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Obligation?
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Re: The real question is...
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You guys kidding?
Nothing more to it than signing up for a newsletter. No money. Sure it would be tough to collect all that money, but think this is smart and well done and how long is not last long? It has been ongoing since November 2009.
Go http://buyabeercompany.com Go!
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The line
All the rules in the world are man made and those are created to protect and to serve the people, not to limit innovation from happening. In worst case, some regulation can even create illusion of security where it may not be the case, like risk investing.
We believe strongly in the mega-trend of crowdsourcing and it's sub level of crowdfunding. So much that for the past two years or so we have taken the big challenge on making this available for web & mobile startups around the world.
Because of the Line Between Crowdfunding And An Illegal Securities Offer, we have developed a very unique community fund model to achieve our goal. Also overall transparency A very big part of the whole service.
For those interested to study this more, here some links:
Article in TechCrunch: http://eu.techcrunch.com/2010/02/15/grow-vc-launches-aiming-to-become-the-kiva-for-tech-startups/
Grow VC model in full detail: http://www.growvc.com/blog/2010/02/grow-vc-model-in-full-detail/
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Good Joke
The best ones always are!
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