Some guys have trouble figuring out what they're worth from day to day, but for other guys it's easy. One such guy is Mike Merrill, a Portland software customer service rep who actually IPO'd his life at $1 a share back in 2008. He issued 100,000 shares, valuing his life at a nice round $100,000.
To say the IPO was undersubscribed would be an understatement of almost comic proportions. In the 10-day period he left the shares open to purchase, he sold a grand total of 929 of them. But that's where the story takes a weird and hilarious turn leading to where he values his life just five years later: at today's share price of $12.90, Mike is now worth $1.3 million.
What does it even mean to IPO your life? Well, for Mike it meant turning over all major life decisions to his shareholders. And when I say all major life decisions, I mean all of them. They made him get a vasectomy (because kids are such a financial drain). They made him date another guy (that time I think they were just messing with him). When his live-in girlfriend objected, all he could tell her was, "Buy more shares."
At one point he had a stroke of genius and paid a web developer $500 and 500 shares to make a website to keep track of the voting. The web developer did him one better and developed an entire digital exchange for Mike Merrill shares. You can find it at KMikeyM.com.
When his relationship with his live-in girlfriend (investor #7) flamed out, he took a whole different approach to dating. Now his new girlfriend gets quarterly reviews with stock options tied to her performance (I swear I'm not making this up).
Amidst all this tomfoolery, the guy has actually done something with his life and now he's a part of the inaugural class of the Nike TechStars startup accelerator where he's working on a gamification of the Nike Fuel Band.
Which is really how this whole thing started in the first place. He wanted to IPO his life and offer his investors a piece of the income he generated outside his 9-5 job. So it looks like that's working out.
I gotta tell you, I cracked up numerous time reading this article. But then it got me thinking: what if there were an exchange where an individual could IPO him or herself? Would that be cool, or would it be slavery? Would you be opening yourself up to investor lawsuits when you act against shareholder interests by getting married or having kids?
I think it would be a really interesting mechanism to find the value of individual human beings.
Would you IPO your life and, if so, what would you hope your opening valuation would be?
that's pretty impressive he is following through with it! This could be leading to EdTV-ish reality tv show, whats his stock worth then?!?!?
What did he do with the proceeds? Nobody launches an IPO with the goal of additional oversight and scrutiny.
On a side note, I've often wondered why college educations are always debt financed (aside from parental support). Why not issue equity that offers a stake in future earning for a given period of time instead of generic date payments that don't scale with your actual income? Obviously the value of such equity would be highly dependent on future cash flow expectations and should price accordingly. Engineers should receive better valuations than art history majors, which would also have the effect of offering instant market feedback to a student considering a wide range of potential majors/careers.
Also, there are a few people I've met over the course of the last several years, "rockstars" in WSO parlance, that I wouldn't mind investing in given their potential. Of course these people would probably rather bootstrap their life.
My only thought is that we actually put a market price on human life (which does not bother me at all).
This is so wicked !! I'm sure it's against some constitutional laws.
On the financial side, how would one value this lad ? DCF ? DDM ? though it feels a bit wrong to use some mere valuation model on a human being !
check out "the unincorporated man"
@proforma Check out Upstart.com. They're essentially "buying" the future earning potential of college grads. I suppose it could work for a lot of people in STEM fields who would rather sell their equity in themselves than take on additional debt.
They're not all DeVry kids either. Here's a Harvard/LSE student looking to IPO herself:
https://www.upstart.com/upstarts/olumurejiwa-fatunde
Pretty interesting concept.
They didn't make him get a vasectomy, it was one of his proposed ideas and it was voted down by the shareholders. I'm still not sure how that would be having to have every life decision ran through a bunch of shareholders, maybe it would help keep you disciplined and prevent you from making bad decisions??
I'm not sure this is legal. You can't own someone as much as they pretend to say they can. They're one lawsuit away from having their business explode.
I suggest we do a WSO joint takeover. We can see if we can get him into investment banking, just to test the accumulated knowledge of WSO.
this would be awesome, get him on upstart with mentors in IB, he is a shoe in.
Brady would just tell him to apply to HBS every year.
I wouldn't, but if I did I would pull a Zuckerburg and make sure that I had a different class of shares that gave me voting rights even if I held below 50% of the shares.
cibo, I am not quite sure I follow who "they" are that you're referring to, but I don't think Upstart can be equated to owning someone. I think it is more similar to Kickstarter. And even then, it is more of a personal loan, just with the repayment being more a variable rate as opposed to a fixed payment/term structure.
Does he release his financials?
And the new most hilarious thing to do with your bonus is...
I reached him a week or so ago, to learn about the share structure (and troll a bit). Specifically, I asked for a prospectus, and for a clarification of how he was indentured to the Shareholders:
Needless to say, I was a little disappointed. I can't help but feel that the website is deliberately vague on this point. Also, unclear on why having one's share price rise is worth anything. (Why bother? Say you follow shareholder instructions, share price rises, you gradually sell your stake.. then what? Just bounce on the whole thing?)
Still, a cool experiment. And on the whole, I'm relieved that this capital markets innovation, at least, won't be responsible for 21st century slavery. We'll leave that to the Student Loan ABS artists among us.
I actually gave this some thought after reading the article. I wonder how many banks would be willing to collateralize a loan with this guy's stock? I mean, theoretically it's worth over a million bucks (and he has the lion's share of the stock). I think it definitely has some value beyond the bid-ask of curious onlookers.
I think it's limited, insofar as there needs to be some force compelling Joe IPO to honor what is basically an "at-will" arrangement. Maybe KMikeyM has some credibility in this respect, but I have a hard time seeing how such an arrangement is credible across, say, thousands of people down the line. What's stopping them from slowly selling their stake and then walking away from the shareholders with a few hundred thousand dollars in their pocket(s)? Especially when the [lack of] structure means no recourse for shareholders?
I would absolutely have MS run my IPO so I could get some ridiculously unjustified valuation.
On another note, why doesn't someone just short him and then kill him?
I wish I had a SB to give you. One of the funniest comments I've read on WSO.
This is absolutely hilarious
+1 for you, this comment is hilarious.
On a different note, what about options? If I think the kid has decent potential but there is too much volatility in his life, can I just buy some calls? Or if he is a prodigy but has a huge drug addiction can I buy puts against my long position? How about a structured note linked to a basket of hand picked HYP class of 2016 kids?
Jesus, you guys are gonna make me build this thing.
I'll make a market.
How ashamed should I be if I've already done this for myself?If you invest equity in someone, you miss out on interest expenses. You guys obviously suck at making money.
huh?
WSO resident lawyer turned financier here. Even if someone IPOs himself you cannot force him to do much of anything.
This is just speculation, but if something like IPOing people became widespread then Congress would basically legislate against it.
ORRRR...it might just become a new facet of the JOBS Act (i.e. crowdfunding).
As for those commenters worried about a guy IPOing himself and then selling all the stock and walking away, how exactly are you protected from the very same thing with any public company NOW? Tons (literally, tons) of stories of founders and CEOs blowing out of their own stock and leaving a shell company behind. It's where we get the term "shell company".
I don't believe the legislative intent of crowd funding was for groups of investors to invest in individuals. IMO, its purpose is to provide greater access to smaller investors and companies in order to stimulate growth. If a case came before the courts regarding a dispute in the IPO of a person I believe this is how it would be interpreted.
When an investor feels they have been defrauded you typically go through arbitration and not the court system. There are a ton of legislative pieces regulating the conduct of a business, which just simply could not apply to an individual. I do agree that you can draw a good number of parallels between a public company and a "public" person, but semantically it doesn't work.
I was playing round with the idea the other day. What if you whole-business-securitize your life? If not the equity, could you sell the mezz? That would be an interesting incentive structure.. the Securitized gets senior cash and junior cash. Obviously, the lein is nondischargeable, and you'd probably want to look at a call option to incentivize performance.
Now you're talking. We should make this a thing.
Couldn't someone take him private and, therefore, make him their slave?
The whole thing is rather silly, but good for him for getting some press, I suppose.
That's what I was getting at with the "new favorite thing to do with your bonus" comment. Buy a controlling stake in the guy (or all the shares haha) and have him do your bidding!
I'm sure I could write him a shareholder rights plan, for a nominal fee.
We could do a WSO takeover and make him run for Mayor, or other political offices.
I have actually thought about IPO'ing myself before, but I decided to stay private.
The ER departments of banks that work on the "people" sector would be interesting to say the least. Trying to project out a person's free cash flow to equity and then decide on a discount rate for it. I'd imagine high beta positions such as finance workers would have significantly higher discount rates than say farmers. Also, if you found out you got a promotion at work or some shit, wouldn't you have to keep it to yourself until some sort of press release?
I've seen over the years on WSO several people offer X% of their income for any leads that land them a job...I thought it was a bit aggressive / weird, but could see it being more common as people try to find creative ways to get a foot in the door.
Do a JV with upstart.com
Does anyone want to start a people hedge fund with me?
I had a great idea, we can call it "The Human Fund" after george costanza's fake charity.
The Human Fund..."Money for people"
I actually started thinking about this after I first read it. In general if you were to sell a % of your income technically someone could gobble up 100% of your income and thus leave you with nothing to live with? Just an interesting thought.
No one talked about figures yet so I might as well get the ball rolling. I think my lifetime earning, projected at averaging $100k/yr after tax for 20 years would be equivalent $2M. Conservative right? That's not including any asset appreciation, stock appreciation, and all of that other stuff. Then again, not taking into consideration buying a house, having kids, and spending on big ticket items. All in all, I'd float 20% of myself for $400K cash at this valuation.
Inb4 I get bananas thrown at me ;(
LOL. I'll bet you would.
DCF model quick!
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