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Twinkies Document #1890 December 10, 2012

Posted by bobv451 in business, charity, e-books, ideas, VIPub, web & computers, writing.
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…and what it means to publishing.

Hostess Inc’s bankruptcy sent shock waves through the snack food world. Who would have ever thought Zombieland was going to be a documentary? Parts of the bankruptcy filing, though, point up something that can be of immense value to those of us in VIPub (Vertically Integrated Publishing) and in so many other fields.

Banks have pretty much stopped lending money, even to the most qualified. There are a lot of reasons for this but Dodd-Franks is part of it, requiring banks to have immense reserves against failure. With the Fed only giving, well, zero, interest, banks won’t give much in the way of interest on their deposits. Come the first of the year Tier I reserve requirements change significantly, too. This will soak up even more money that might go for loans. (The banks will buy gold).

But the Hostess bankruptcy brings out a new way of financing. Or not so new, merely gqthering steam. The buzzword for it is “private equity.” This can come from hedge funds or individual investors (think Warren Buffett) but they operate at levels swapping billions of dollars not hundreds or thousands. One of my favorite charities, if you want to call it that (and I don’t, really–I see this as what capitalism is all about) is http://www.kiva.org Muhammed Yunas won a Nobel Prize in 2006 for the idea of micro loans.

We’ve seen crowdsourcing bring in $200meg to save PBR at BuyABeerCompany.com Document #1890 is a proposal to use crowdsourcing to buy Hostess.

If you have a few bucks you can finance a painting or Twinkies or … a novel. Steve Sullivan’s recent kickstarter project financed his Death Tournament project. Matt Forbeck financed his “12 in ’12” project, writing 12 novels in 12 months, one trilogy at a time. With the Big 6, er 5, publishers pulling stunts like backing Author’s House rather than authors, we don’t have to be left out in the cold. Small amounts of money (relative to keeping Twinkies afloat or at least something more than put into time capsules) is within our grasp using the same technique. Find a project. Back it. Or get ambitious and start one of your own.

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-twinkies

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