If you want to become a multi-millionaire there is normally no real short cut. As an entrepreneur you have to be smart and willing to take big risks. You’ll have to work extremely hard for many years, with tons of stress, failing relationships, and sometimes even health problems as a result. For entrepreneurs the result is never guaranteed, so you could still end up with nothing. Is it worth it? Of course, because most people don’t do it for the money, but because they like the thrill and the feeling of winning. But if there would be an easier way to earn your first millions that would certainly be nice.
It turns out that a few weeks ago there was a huge opportunity to become a multi-millionaire in a short time without too much hard work. Business Insider, a site I actually used to write for a couple of years ago, posted an article about a stealth start-up that offered non-employees up to 100,000 shares in the company. Like most people I dismissed the article as a scam, but I probably should have read it a bit better.
The stealth start-up turned out to be Jet, a company that has not launched yet but already closed a second round of funding at a rumored $600 million valuation. The 100,000 shares are the same amount given to very early top management employees, meaning probably somewhere in the 2-5% range. That would put the value of the 100,000 shares at a staggering $12-30 million right now! To be fair, these are stock options and I don’t know the strike price, but assuming that they are based on the first round which was probably done at about $200 million post-money they would still be worth $8-20 million right now. And the company has not even started operations yet!
What did you have to do to get these shares? Very simple, you just had to get other people to sign up for the site. In January an IT guy at a funeral insurance company in a small town in Pennsylvania, Eric Martin, read about the contest and decided to check it out. He went online and saw that 10 contestants who would manage to sign up the most people would get 10,000 shares and that the number 1 would get 100,000 shares. The funeral insurance guy asked 3 of his family members to sign up and was suprised to see that while he had rank 232,582 when he signed up, he went to 13,767 with one sign up and to 5232 with just 3 sign-ups. So what do you do in such a situation?
Eric was smart and realized that if your rank goes up so quickly most people were not really competing for the big prize. He downloaded a statistics app, plugged in the numbers, and was surprised to find out that he should be in the top 10 with just 2000 sign-ups. If you know a bit about the Internet you probably realize that that’s actually not so hard to do if you have enough time or if you are willing to spend a few thousand dollars. Time was not on Eric’s side, however, because he only joined the contest a few weeks before the end and most people had been competing for over 6 weeks already, but he was willing to spend some money.
There are a lot of websites where people (often mothers sitting at home) go to earn some money by filling out forms or surveys. Eric knew of these sites and decided to spend a total of $3000 on Swagbucks.com to get people to sign up using his referral link. The result was that within a few days Eric had 2000 sign-ups and was in the top 10 already! At that moment he probably smelled that he may be able to win this contest if he would continue this strategy, especially after he received an email from Jet that had the total numbers of sign-ups of all the contestants in the top 10 in it. It turned out that the number 1 only had 4000 sign-ups so far!
So Eric decided to double down and started to spend serious money on his campaigns, making him the #1 with just 3 days to go before the competition ended. Of course the other competitors also did not sit still and bought ad campaigns as well, but by putting up a big Facebook campaign on the last day of the contest Eric managed to win. He spent a total of $18,000 on this, but that may turn out to be one of the best investments ever if Jet gets an exit.
I love this story, it shows that if you are smart and willing to put some money at risk you can have a chance to earn a life-changing amount of money. It’s a bit like angel investing, only in this case the pay-off is significantly higher than the average angel investment. I hope for Eric that Jet will make it!