Meet the Man Who Sold His Fate to Investors at $1 a Share

On January 26, 2008, a 30-year-old part-time entrepreneur named Mike Merrill decided to sell himself on the open market. He divided himself into 100,000 shares and set an initial public offering price of $1 a share. Each share would earn a potential return on profits he made outside of his day job as a customer service rep at a small Portland, Oregon, software company. Over the next 10 days, 12 of his friends and acquaintances bought 929 shares, and Merrill ended up with a handful of extra cash. He kept the remaining 99.1 percent of himself but promised that his shares would be nonvoting: He’d let his new stockholders decide what he should do with his life.

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.

“I figured they’d make good decisions for me, since they had money on the line and wanted to see their investment appreciate.”

The corporate oversight got more complicated in August 2008, when Merrill moved in with shareholder number seven: his girlfriend, Willow McCormick. Though they’d been dating for two and a half years and generally got along great, it wasn’t an easy decision for Merrill. McCormick taught grade school, and her idea of fun was playing Boggle at night with her friends. Merrill couldn’t stand Boggle. He was more interested in things like planning the whiskey-drinking group with his buddies. “His ideal relationship was one in which we lived harmoniously independent lives, and I think mine was a little more traditional,” McCormick says.

Steve Schroeder, one of Merrill’s oldest friends, was upset that he hadn’t been consulted about the move-in. He may not have put much money in—just $139 for 66 shares—but that still gave him 4.8 percent of the voting stock. McCormick had only 19 shares, so technically Schroeder’s opinion should have carried approximately three times as much weight. If Merrill was now going to spend more time at home with his girlfriend, he would have less time to pursue activities that were priorities to shareholders with larger stakes.

Merrill hadn’t intended to give shareholders control over his private life, but he realized that Schroeder had a point. “I figured they’d make good decisions for me, since they had money on the line and wanted to see their investment appreciate,” Merrill says.

McCormick didn’t see it that way. Merrill started spending more time with Schroeder and his other shareholder friends, who jointly controlled a large block of stock. To McCormick, it seemed like a corporate takeover of her boyfriend and gave new resonance to the famous book about corporate buyouts, Barbarians at the Gate. “There were a ­couple of friends I did have some issues with, and they had a big say in how Mike spent his time,” McCormick says. But when she tried to talk to Merrill about it, he would offer what he said was a ­simple solution: “Buy more shares.”

McCormick seethed. “I didn’t want to play into it,” she says. “I felt like my status as a girlfriend earned me his ear, like the way a first lady has the president’s ear.”

When they started dating, McCormick and Merrill had a series of conversations about whether Merrill should get a vasectomy. At first they agreed that it was a good idea; neither thought they wanted kids. But now that she was a ­little older, McCormick wasn’t so sure. “I started to have stirrings,” she says. “I was feeling less certain.”

Then, on August 10, 2008, Merrill asked the shareholders to decide whether he should get a vasectomy. He didn’t tell McCormick that he was going to bring them in on it. As the CEO of himself, he simply wrote a note to his shareholders explaining his position on the subject. “Children are a financial drain,” Merrill wrote. “The time investment of raising a child is immense. The responsibility is epic. The impact on future projects would be drastic. In light of these factors, it makes sense to reduce the chances to nearly zero and have a vasectomy performed.”

McCormick was furious and embarrassed. “He made our personal life public without consulting me,” she says. It got worse when the ballots came in. Schroeder voted yes. Josh Berezin, a grade-school friend and political consultant, voted yes. To McCormick, it wasn’t just a referendum on the vasectomy. It was also a referendum on whether Merrill’s friends thought he should have kids with her. It was, she says, “a judgment on me.”

It wouldn’t be the first time that outside investors tore apart a close relationship among a company’s principals. For recent ­examples, look no further than Eduardo Saverin, Mark Zuckerberg’s onetime pal who was pushed out of the company he helped found. And like Saverin, McCormick decided to fight back.

Who Owns Mike Merrill?

Merrill has sold or given away 3,711 voting shares in himself. The equities were initially priced at $1 each. They have traded as high as $20. Here’s a breakdown of his shareholders. — J.D.

Douglas Stewart

8.14% 302 shares Strategic investor (stranger)

Greg Borenstein

8.46% 314 shares Programmer

Gordon Shephard

13.2% 490 shares Strategic investor (stranger)

Willow McCormick

0.51% 19 shares Ex-girlfriend

Fiona Garlich

0.13% 5 shares Ex-girlfriend

Curt Merrill

1.02% 38 shares Brother

Kenneth H. Merrill

0.84% 31 shares Father

Marijke Dixon

3.96% 147 shares Current girlfriend

Josh Berezin

3.69% 137 shares Old friend

Steve Schroeder

10.21% 379 shares Old friend

Others

49.8% 1,849 shares Friends,

acquaintances,

work colleagues, strangers

As a ­public-school teacher, she couldn’t afford to buy a controlling stake in her boyfriend. But there might be another way: She decided to become a shareholder activist and try to persuade ­people to vote no on her behalf. At the time, the largest ­single shareholder was Greg Borenstein, the programmer who had received 500 shares as payment. Though Borenstein wasn’t an old friend like Schroeder or Berezin, his votes far outweighed theirs, despite his having sold almost 200 shares. “I felt weird about it,” Borenstein admits. “I could basically decide the issue because I had so many shares. It was a lot of responsibility.” McCormick says she and Borenstein reached an understanding that he’d vote in line with her wishes. With Borenstein’s votes behind her, she managed to get the vasectomy rejected by a margin of 456 to 387.

In July 2009, a year and half after Merrill IPO’d himself, some participants on a discussion board called Hacker News were debating the hypothetical possibility of a personal IPO. “Sometimes slavery can be beneficial for slaves,” one commentator noted.

Marcus Estes, a shareholder and friend of Merrill’s, saw the thread and posted to say that it was no longer simply a theoretical discussion. “Mike Merrill is an American individual who already has succeeded in becoming a publicly traded person,” Estes wrote. “Shareholders vote on major life decisions, such as whether he should engage in certain business ventures, and even on very personal questions, such as whether he should get a vasectomy. Buy some shares, try it out!”

Gordon Shep­hard, a 40-year-old director of engineering at a software company in Redwood City, Cali­fornia, was also following the discussion—and he was fascinated. Though he knew almost nothing about Merrill, he started buying stock from shareholders like Borenstein and Schroeder, eventually investing a total of $6,436.41. “I’m a Silicon Valley guy,” Shephard says, noting that he already had stock options, a 401(k), and an IRA. Now he had a position in Merrill too. “I viewed it as a radical diversification of my portfolio,” he says. Shephard kept offering higher and higher prices, eventually bidding the share price up to $11.75, vaulting Merrill’s market capitalization to almost $1.2 million. Schroeder stood to make a serious return on his investment. Both he and Merrill’s other close friends decided to keep selling. “We’re not idiots,” Schroeder says. “The price was too good.” Even Merrill’s brother cashed out, spending his profits on a new dishwasher.“I didn’t blame him,” Merrill says. “He needed a dishwasher.”





“I felt like our

relationship didn’t come

first in his life,” she

says. “The Mike I knew

got swallowed up

by KmikeyM.”

Right around this time, Merrill asked his stockholders to decide whether he should attempt something known as poly­phasic sleeping. The idea—touted by Buckminster Fuller in the 1940s—was to cut total daily sleep time to less than four hours by taking naps throughout the day and night. “If it is achieved, it should result in an additional three to four hours of productivity added to each day,” Merrill wrote to his shareholders. He proposed trying it for three months.

McCormick thought it was a ter­rible idea and voted no with her 19 shares. She also got Borenstein to vote no. But now Shephard, a total stranger, was the ­second-­largest stockholder, and he was fascinated by sleep-­modification strategies. He’d heard of polyphasic sleeping but had never given it a try. It was likely to be a massive disruption to Merrill’s life, but here was an opportunity to test the idea vicariously. Shephard voted yes: His short-term goals outweighed any longer-term considerations. McCormick and Borenstein were two of only four shareholders to vote against the proposal, which was approved by a tally of 639 to 373.

Merrill began sleeping in short bursts at work and throughout the night. At odd hours she’d find him asleep in bed, wearing a sleep mask and ear buds for one of his cat naps. She cooked dinner alone, and then Merrill would wake up and groggily join her. He was tired and cranky. Within a few weeks, Merrill felt like an exhausted, miser­able zombie. Thirty days into the experiment, he gave up. Polyphasic sleeping, he concluded, was a myth. “It turns out Willow was right,” he says. “It was a really dumb idea.”

McCormick hoped the experience would make him question the role of the shareholders in the couple’s lives. The shareholders, meanwhile, were well aware of their power. “If he doesn’t do whatever we say, we’ll sell and his share price will fall,” Berezin says. And sure enough, when shareholders voted him vegetarian, Merrill complied, even though he had been an avid meat eater. He was a longtime Democrat, but his investors decided to make him register as a Republican, which they argued was more ­business-friendly. That was too much for McCormick. She wanted to be in a relationship with Mike, not the entity known as Mike. So, after five years together, they decided to split.

“I felt like our relationship didn’t come first in his life,” she says. “The Mike I knew got swallowed up by KmikeyM.”

Soon after the split, Merrill received a $100,000 life insurance policy as a new benefit at his customer-service job. Shareholders quickly decided that in the event of Merrill’s death, the policy should be distributed among them. It opened up the possibility that, in financial terms, Merrill might be a more valuable asset if he were liquidated. Investors who had no personal connection to Merrill might be tempted to vote for him to jump off a bridge.

After the breakup with McCormick, Merrill spent a lot of time with his shareholder friends. But when spring swept into Portland in May 2012, he decided he was ready to start dating again and asked his shareholders if they wanted to oversee his romantic life. “Under normal circumstances, no one is going to complain when someone is buying flowers or going out to dinner and a movie. But as a publicly traded person with a responsibility of productivity to the shareholders, we live under special circumstances,” Merrill wrote to them. “A relationship is likely to affect both the productivity and the output of KmikeyM.”

Shephard enthusiastically endorsed the idea of supervising Merrill’s search for romantic mergers. “I truly believe that a healthy, balanced relationship is one of the foundations of all great endeavors—and, therefore, a third-party, clear, ­unbiased perspective may be helpful,” he posted to the investor forum on May 1. The resolution—titled “Shareholder Control of Romantic Relationships”—passed by a margin of 716 to 113.

Merrill debuted the Romance Advisory Committee site in June 2012. Each interested shareholder received a password and could monitor Merrill’s romantic activity while anonymously voting candidates up or down. There was also a “candidate referral form” in case anybody wanted to suggest a match. Merrill assigned each prospect a pseudonym and posted after-action date reports. Just as companies chafe under the burden of filing quarterly earnings reports, Merrill found all the writing tedious, but shareholders demanded regular updates.

The first candidate was a cute 28-year-old administrative assistant named Marijke Dixon (code name: Agassi Dakota). Merrill invited her out for a glass of sparkling wine and then to see an obscure Norwegian thriller. In his report, he noted that she was squeamish during some of the movie’s more violent moments. “Since this is the first date I’ve been on since we started this project I’m not sure what sort of information the shareholders need to make an evaluation,” he wrote. “So please leave questions, and I’ll do my best to answer them.”

The investors asked if they got a drink after the film (no), what he thought of the movie (so-so), and if he was attracted to her (“Yes, I am!”). Shareholder approval hovered around 60 percent.

For her part, Dixon was into Merrill. “I tend to date ­weirdos,” she says. She also thought it would be an interesting challenge to win over not just Merrill but all of his shareholders. She decided to start accumulating shares so she could influence decisionmaking, initially buying 50 shares for $90. “I would have bought more, but I’d just moved into a new apartment and was short on cash.” In a modest way, she was launching the equivalent of a corporate takeover, though it was unclear yet if she was planning a merger or an acquisition.

But some shareholders had other ideas. One anonymous investor sent Merrill on a date with a polyamorous woman. “She is currently seeing someone, but she has permission to date,” he wrote in his after-action report. “I’m of mixed feeling about that, but I recognize that this is a decision for the shareholders to make.” They decided against continuing the relationship but gave a 97 percent approval rating to a guy referred to as Jordon California. Feeling the weight of investor expectations, Merrill spent a drunken night “fooling around” with him. Like companies that stray from their core business to pursue an ill-advised acquisition (AOL/Time Warner, eBay/Skype), Merrill was slightly hung over the next morning—and only more convinced that Dixon was the one.





In an effort to sway his overseers, Merrill described his growing feelings for Dixon in subsequent date reports. He highlighted what he liked about her, from her piano playing to her impressive knowledge of financial markets. “This is a very strong candidate,” he wrote. Her approval climbed to match that of Jordon California, and Merrill decided that management could break the tie. He chose Dixon, and they signed a three-month relationship contract.

Dixon was excited. She liked Merrill, but she also liked the idea of accumulating shares of him. So when the three-month term was up, she asked for a sweetener: She wanted stock options this time. The proposal made sense to Merrill; Silicon Valley companies often use stock options as a way to reward people involved in an enterprise and strengthen their loyalty. The more shares Dixon acquired, the more investment she’d have in the success of the relationship. Merrill agreed to award her 100 options in their next contract. The strike price—the price of the shares at the time the option is exercised—would be pegged at 5 pm on the day the contract was ratified by shareholders.

On the afternoon of ratification day, Dixon deliberately sold a share for 99 cents in an effort to game the market and set the strike price artificially low. Another investor caught on to the ruse and fired back by buying a share at $12. But, at 4:59 pm, Dixon managed to scoop up a share for $1.52. The clock hit 5, and she locked in a paper profit of roughly $900.

Merrill was touched. To him it was a romantic gesture. None of his projects had yet flourished or paid dividends (the Rwandan chicken farmer had run off with the $79.63), and yet Dixon believed in him enough to try to accumulate as many shares as pos­sible. “Instead of getting me flowers, she was trying to buy me,” Merrill says. “It bodes well.”