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.

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Companies: pabst brewing

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Comments on “The Questionable Line Between Crowdfunding And An Illegal Securities Offer; The Pabst Brewing Case Study”

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Vince (profile) says:

They might be ok — from the website it seems that they are not offering any ownership interest in future profits, but rather “enough beer to match your pledge” and a certificate. Thus, people paying are not “led to expect profits solely from the efforts of the promoter or a third party.”

I think this is probably a joke though. I don’t see how they could actually make it work.

Anonymous Coward says:

Re: Re: Re:

(Replied to myself) Google tells me we had different references. GP had a movie reference that I’ve never heard of and mine was from the song “Pabst Blue Ribbon” by Ceann, that quotes the movie. That part of the song makes sense now!

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…

Brooks (profile) says:


It clearly says “send no money”. If and when they actually start collecting $5 from people, then *maybe* there’s an issue here. Likely not even then, depending on structure.

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.

Valto (user link) says:

The line

Crowdfunding in it’s different forms for sure need some serious balancing act between, what can and can not be done. And when that model is taken even close to “investing” it gets even more difficult to find a workable model. I think in this case they should be ok.

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:

Grow VC model in full detail:

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