Meet the Man Who Sold His Fate to Investors at $1 a Share | Wired Business | Wired.com

Every year, tech-industry entrepreneurs make a similar decision. Taking on investors is usually one of the first steps in Silicon Valley’s well-established path to outrageous fortune. Merrill wasn’t running a startup per se, but he had plenty of great ideas and ambitions—videogames he wanted to develop, a data backup service he wanted to launch, a whiskey-tasting society he hoped to form. He needed venture capital, but as an ordinary guy, he had limited access to capital markets. That didn’t hold him back. He simply relied on the support of the motley group of programmers, bloggers, and baristas he knew in Portland. It was Silicon Valley–style finance, writ small.

But, like many entrepreneurs before him, Merrill soon learned the downside to taking on outside funding. In the ensuing months and years, 128 people bought shares of Merrill, and he fell victim to competing shareholder interests, stock price manipu­lation, and investors looking for short-term gains at the expense of his long-term well-being. He was overwhelmed by paperwork and blindsided by takeover interest. He found himself beholden to his shareholders in ways he had never imagined, ruining personal relationships along the way. Through it all, Merrill clung stubbornly to the belief that since an IPO had worked for Google and Amazon, it should work for an individual too.

He isn’t alone in this theory. Upstart.com, a company founded last year by Google exec David Girouard, offers a bit of capital in exchange for a cut of a college graduate’s future earnings. Other startups, like Pave and Thrust Fund, solicit investments in entrepreneurs for a return on their future ventures. (And of course David Bowie, European soccer players, and a minor-league baseball player have all sold shares of their earnings.)

But Merrill has taken it further. He felt that more people would invest in him if they knew they were going to have a say over which projects he pursued. To enable this oversight, he paid a developer 500 shares and $500 to build a website that allowed shareholders to vote on his priorities and projects. The developer also coded a trading platform so Merrill’s stock could be bought and sold after the IPO. Anybody could now get a piece of him; you just had to click a Buy button on KmikeyM.com (the site is an abbreviation of Merrill’s full name: Kenneth Michael Merrill).

Initially, shareholders voted on a variety of small projects. On February 15, 2008, for example, Merrill asked whether he should make a short video to market shares in himself. His investors voted that idea down, but a month later they approved an investment of $79.63 in a Rwandan chicken farmer.