The latest trend in raising funds is called crowdsourcing.You put together a crowd, ask them for donations for your project, and then you go do your project.
Michael Migliozzi II and Brian William Flatow thought that crowdsourcing was the perfect solution to their heady dreams of owning Pabst Blue Ribbon beer.
The old staple of your grandfather's era is very trendy these days, the hipster's choice of non-hip brews. The brand's owner was ready to sell.
The partners went out into the world and found a mob of people who were willing to contribute an accumulated $200 million in pledges. In return, the donors would get a stylish certificate of ownership and the value of their donation in beer.
All in all, it was a good deal for everyone.
Except for the SEC, however. The Feds cracked down on the crowdsourcing because Mr. Migliozzi and Mr. Flatow failed to register their offering as old-fashioned securities.
And because they didn't go through proper regulatory steps, the SEC made the gentlemen abandon their fundraising effort, take down their website, and stop asking for donations on Facebook or Twitter.
There are times when you have to agree with the Republicans when they lambaste the stifling restrictions that government bureaucracy places on start-up businesses.
With the crowdsource crowd blocked in their effort, Pabst Blue Ribbon was recently purchased by C. Dean Metropoulos for the amusement of his sons.
The young Metropoulos has immediately begun to reposition the blue-collar brew as the drink of the trendy and famous, the direct opposite of its promotion by the executives who brought the brand back from the brink of extinction.
Those same executives, some of whom were shown the door by young Mr. Metropoulos, are calling on PBR drinkers to boycott the beverage, to express their outrage.
That wouldn't be happening if a pair of social-media savvy PBR lovers had been able to acquire Pabst through the very modern mode of crowdsourcing.
The SEC has killed PBR as we know it.
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