Ask Humorix: Do-It-Yourself IPO
Feature written by on Friday, September 24, 1999
Anonymous Brave Person writes, "I've been watching with much amusement as companies have announced IPOs and made millions -- or billions -- of dollars even though they haven't turned a profit. How can a "company" like LinuxOne issue stock worth $24 million when their sole product is still in beta? More importantly, is it possible for me to have my own IPO?"
The Humorix Oracle replies,
Yes, you too can become a billionaire by suckering Wall Street investors enamored with Internet and Open Source stocks into buying stock in your fly-by-night operation.
A Do-It-Yourself IPO is not that difficult. Here's 7 easy steps:
1. Invent some kind of product. Typically this will fall into one of two categories: a new Linux distro based on Slackware, Debian, or Red Hat, or yet another content-free Linux portal website.
Creating a new distro is not that difficult. Just take an existing one and add a few touches, making sure to issue a global s/Red Hat/Your Distro Name command. Translating an existing distro into a new language is also a possibility. For instance, Linux has made only limited headway into the following ripe markets:
- Ancient Egyptian (hieroglyphics may be a challenge, though)
- Pig Latin (this may be the strongest type of encryption allowed by the DOJ in the near future)
- Microspeak (former Microsoft employees probably don't want to use Windows all of their lives)
- Cyrillic (to take advantage of the booming Russian economy)
- Klingon (it's a wonder this hasn't been done yet)
- Binary (nothing but 1's and 0's)
Or, if your Research & Development budget is tight, you may elect to create a Linux portal website as instructed in Humorix's Linux Portal mini-HOWTO.
2. If you are selling a Linux distro or other product, create a website hyping it. Obtain a domain name containing "linux" (assuming all of them haven't been taken yet). We recommend that you don't create your site using any Microsoft software, however this isn't an absolute rule. The recent flurry of Linux press releases begging to be run through the Demoroniser proves that investors aren't really concerned with whether your Linux company actually uses Linux.
3. Set up a physical location (in other words, a brick-and-mortar place in meatspace). This doesn't need to be any more elaborate than a basement; however, a more formal location may come in handy if any Venture Capitalists drop by.
4. Incorporate. Find a couple of friends (preferably one with legal experience) to help you form a legal corporation. The S-1 filings of other IPO-bound companies often contain sample corporate bylaws and financial reports that you can steal and modify for your own use.
5. Obtain and fill out the necessary IPO paperwork with the SEC. As mentioned before, you can cut-n-paste content from the S-1 filings of other companies. For example, almost every tech company has "We might get sued by Microsoft" and "The Internet might collapse" as possible risk factors, so you should too. To save money, be sure to "self-underwrite" your IPO and not mess with an expensive Wall Street firm.
6. Send out buzzword-laden press releases over the wires trumpeting your IPO and whatever product you've finally released (if any). Don't mention the fact that your corporation consists of only you and a few buddies who have no clue how to run a business. Again, you can copy and alter other company's press releases for your own use (this is what Open Source is all about).
7. Play by the SEC's rules until the Big Day when your IPO happens. At that point you'll be able to join the Billionaire's Club. And remember: you've "earned" it!