Day Trading - check. Real Estate Flipping - Check. Selling Amway and Time Shares - Check Check. Tried "Crowdfunding"?

I read an interesting story at TreeHugger this morning about a California company that is recruiting twenty thousand people to help "manage" its new eco-friendly clothing line called Nvohk. This site, which is supported by TransWorld Surf, is looking to sell memberships at $50 a pop to between twenty and forty thousand (e.g. 1-2 million USD) people in order to seed finance the new clothing venture. "Members" will hold no debt or equity in the fledgling company but they will participate in "net profits" (actually redeemed via a company issued soft currency/reward points) and help make "major decisions" which according to Nvohk shall include: logo designs, product designs, advertising, etc.

Nvohk is banking on the fact that Members desire the pride of ownership without actually being an owner. Conceptually i think this is a very clever model (taking the capital risk out the business without dilution or loss of control while getting members to work for free in sales, marketing, promotional and product development capacities) but in practice i think it's going to be difficult to pull off; steering twenty thousand strangers to make a decision will be like herding cats and once some members finally read the fine print then they could become disgruntled and this may pollute the community at large. Furthermore, let's face it, some of these members are going to be a real pain in the ass (think lawsuits, unionizing, and horse heads sent to the board members' Sealy Posturepedics) and there be a lot of time spent on member to member damage control - it only takes a few bad apples to radicalize the lot. Having said that I don't think any of these criticisms are necessarily a function of this project (e.g. you will have this type of behavior with any large group efort) itself but it is something that effects all web communities and especially when there's an economic component, like there is here, people tend to be more vocal and passionate about getting what they feel they are entitled to. I completely understand the pride of ownership factor and i am sure that the site's supporter has the best of intentions in launching this initiative and i wish them all the best. Before i wind this post down please allow me to pee in their Cheerios for moment. IN CAPS BELOW i've translated (in my humble opinion) what the company (not the member) "gets" from its members if it's not already obvious.

HERE'S WHAT YOU GET AS A MEMBER... (according to the company)

• the opportunity to actively create and manage nvohk from the ground up. you get to run the company. (YOU GET PLACED IN A VIRTUAL PETRI DISH WITH THOUSANDS OF OTHERS WHO DIDN'T READ THE FINE PRINT NOR THINK THROUGH WHY A DEMOCRATIC DECISION MAKING PROCESS AMONGST TWENTY THOUSAND STRANGERS IS A NIGHTMARE. THE COMPANY'S FAQs STATES THAT IT WILL HAVE AN INDEPENDENT BOARD AND AN EXPERIENCED MANAGMENT TEAM TO MAKE DECISIONS. E.G. YOU WILL BE PAYING THEIR SALARIES.
• 35% of net profits are distributed to members via "reward points" that can be used to buy nvohk products (SINCE THE COMPANY CAN DETERMINE WHAT ITS, IF ANY, "NET PROFITS" THEY ARE  ESSENTIALLY DANGLING A CARROT SO THAT YOU WORK FOR LESS THAN FREE. (WORKING LESS THAN FREE MEANS THAT YOU NOT ONLY GET NO PAY BUT THAT YOU MUST SPEND MONEY ON PRODUCTS TOO). THE REDEMPTION OF "REWARD POINTS" IN LIEU OF CASH MEANS YOU ARE LOCKED IN A VICOUS CIRCLE OF BUYING COMPANY SCHWAG. PLUS, YOU ARE INCENTIVIZED TO  TELL EVERYONE YOU KNOW TO BUY THE PRODUCT SO THAT YOU MAKE MORE "PROFIT" FOR THE COMPANY. LIKE BUYING HERSHEY STOCK AND GETTING PAID YOUR DIVIDENDS IN CHOCOLATE. 
• upon activation members will receive 1) an exclusive nvohk t-shirt, 2) member sticker, and 3) a "plant-a-tree" seed pack. FIRST 'UPON ACTIVATION' MEANS THAT THEY ARE NOT ACTUALLY MOVING FORWARD WITH THIS PROJECT UNTIL US SUCKERS PUT A MILLION BUCKS IN THEIR COFFERS - SINCE THEY DON'T WANT TO PUT THEIR OWN CAPITAL AT RISK. SECONDLY, HOW CAN THEY PASS OUT THE NVOHK T-SHIRT'S TO MEMBERS ONCE THE PROJECT IS 'ACTIVATED' IF THE MEMBERS ARE THE ONES WHO ARE SUPPOSED TO BE MAKING THE DECISIONS ABOUT PRODUCT AND LOGO DESIGN? ANYWAY, THE FIVE DOLLAR COST OF GOODS (T-SHIRT, STICKER, SEED) FOR THE SCHWAG IS AND EXPENSE THAT WILL BE LINE ITEMED AGAINST YOUR NET PROFITS ANYWAY SO DON'T BE TOO HAPPY ABOUT GETTING SOMETHING. YOU ARE A WALKING TALKING BILLBOARD.
• members
  will receive regular business updates and vote on major business
  decisions (e.g., logo design, product designs, advertising, sponsored
  athletes and musicians, etc.) (THEY WILL USE YOU FOR FREE MARKET RESEARCH AND SPAM THE BEJESUS OUT OF YOU TO SELL YOU STUFF)
• members
  will receive a 25% discount on all nvohk product purchased directly
  through nvohk.com; as well as a 10-day exclusive purchase window before
  products are offered to the public. I ASSUME THIS IS 25% OF RETAIL WHICH MEANS IT'S ALREADY MARKED UP A FEW HUNDRED PERCENT OVER COSTS OF GOODS. AND SINCE THEY ARE SETTING THE PRICING THIS NUMBER CAN BE MASSAGED BY THEM. NOTICE NONE OF THE 'MAJOR DECISIONS' IT CITES IS RELATED TO COST OR PRICE POINTS. 
• members will also be entitled to receive custom product offers from nvohk's business partners (DID I MENTIONED THAT YOU WILL BE SPAMMED)

Sign up yet? If you look at the sites terms and conditions it does say that the membership is for entertainment but i am pretty sure that most of the members are not going to read the T&C's. Hopefully the Crowdfunding idea will take off and prosper at Nvohk. I guess we'll just need to wait and see.