A few weeks back I mentioned a couple of stealthy, blogging related projects that were consuming time and energy. Now it's time for one of them to surface:
For the last few months I've been acting as an advisor to the team putting together Pajamas Media, a syndicate of bloggers that will form both an advertising network and a source of high quality, bylined content. That team includes Roger Simon, Charles Johnson, and my friend and Winds of Change colleague Marc 'Armed Liberal' Danziger. Roger's post gives more details of the editorial board and points of contact for bloggers and others.
In addition to a gratifying number of bloggers interested in joining the network, the team has been getting a number of inquiries from possible investors. While that's also gratifying, they've asked me to explain a few rules of the road on investing in small, private companies, since many of the questions seem to be coming from those without that experience. And when I say rules, I really mean 'laws'.
Assuming the PJ Media team decides to take outside investment, it will be only from qualified, 'accredited' investors, per the SEC definition. Go read it now.
You're going to have to come up with reasonable evidence (there's a standard questionnaire) that you're in that category to get information, so the PJ team doesn't potentially get in trouble for making an unregistered offering. You should have prior experience in private equity investment and be able to demonstrate that as well. You should be interested in making up a reasonable proportion of a few million dollar total capitalization, because the team will run afoul of another SEC limit if they took on many investors. And if you're an individual in this category, you'll be working through a broker/dealer when and if that time comes around. (And, no, I'm not one.)
Sorry to be exclusionary, but that's the law. There's a good reason for it, too: The technical terms for this kind of investment are 'illiquid' and 'speculative'. For almost everyone reading this post, and most bloggers, you're going to be better off speculating with your blog traffic, not your capital. And, frankly, the team won't have the time to deal with those who don't know how such deals are structured.