Here is an excerpt of an article I came across in Computer Business Review Online. I had to double check the date to make sure it wasn’t April 1. Actually it was reported just last week. Maybe news of the collapse of the dotcom bubble was slow to reach Canada. I’ve deleted the name of the company to protect the innocent.
“_____________, a start-up that plans to develop a web-based collaboration software package that will enable estranged parents to communicate directly with each other instead of using their children as messengers, is planning to raise $400,000 in an IPO.
The Calgary, Canada-based company, which hopes its shares will be listed on the over-the-counter market, is unusual in making a public offering. Early-stage companies normally rely on venture capitalists to get off the ground.
However, it is doubtful whether a VC would put any money into ______on the strength of its SEC filing. The company has not yet developed a product, and research into the potential market has simply consisted of web searches.
“We are currently devoting 100% of our human resources to the development and approval of this prospectus and, due to the lengthy approval process, we do not expect to begin any product development until after the effective date of this prospectus,” said the company.
Potential investors will have to be patient. “The ______ Development system is not developed at this time, there are no ‘beta’ versions available, and _______ Development does not expect that the system will be functional until at least 6 months after the effective date of this prospectus,” it said.
All _______ consists of is an idea for its system. It acknowledged: “We are attempting to create a commercially viable product based on a yet undeveloped software concept.”
Heck, just a few years ago these folks could have added an exta zero to the sum they are trying to raise with no problem. To paraphrase Robert Duval, “I love the smell of burning money in the morning.”