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>I've never agreed with that. As a private company you can be in business for whatever reason you want. If by 'you' you mean 'the owners' who are the share hol

>I've never agreed with that. As a private company you can be in business for whatever reason you want. If by 'you' you mean 'the owners' who are the share holders, then yes. What you'll find is that generally share holders do want economic returns at the cost of anything else, especially when so many of the owners each own only a tiny slice of many different businesses. Part of it is that it will be difficult for the owners to come to an agreement on anything else and so they'll go for economic returns. There is also a selection effect concerning when executives at a company are replaced. Are owners choosing when to replace executives in such a way that selects for executives who put short term profitability over other concerns?

phkahler 8y ago
>> If by 'you' you mean 'the owners' who are the share holders, then yes. NO. I guess what I mean is that the FOUNDER(s) of a company have a reason for it to exist. They get to define everything about it. If at some point they need to raise money by selling shares, they get to define what the shareholders get in return for their investment. The share holders are free to take it or leave it. This scenario was probably present in every public company at some time in its history. AFAIK no company has ever been created via IPO. Even if a group of founders (who may also be initial private investors) creates a new company, they define a purpose. It may be to "make money doing X" or it may be "develop a better Y" just because they are into Y, Or "cure disease Z", establish a human presence on Mars, build a better search engine. Most founders probably want to make some money - otherwise we call it philanthropy - but that doesn't mean they are mutually exclusive. But in every case I think the company exists prior to 99 percent of the investment that comes after something has been defined beyond profit.
- PurpleBoxDragon 8y ago
  >The share holders are free to take it or leave it. And they tend to take the offers from founders that give them voting power to decide the reason for the company to exist. If a founder wants to raise money without trading away power in the company they can try to sell such shares, but they should expect far less interest in people wanting to buy them. Also, should we really call them shareholders or investors at that point? They are more like backers, similar to people who spend money on kickstarter.

phkahler 8y ago

>> If by 'you' you mean 'the owners' who are the share holders, then yes. NO. I guess what I mean is that the FOUNDER(s) of a company have a reason for it to exist. They get to define everything about it. If at some point they need to raise money by selling shares, they get to define what the shareholders get in return for their investment. The share holders are free to take it or leave it. This scenario was probably present in every public company at some time in its history. AFAIK no company has ever been created via IPO. Even if a group of founders (who may also be initial private investors) creates a new company, they define a purpose. It may be to "make money doing X" or it may be "develop a better Y" just because they are into Y, Or "cure disease Z", establish a human presence on Mars, build a better search engine. Most founders probably want to make some money - otherwise we call it philanthropy - but that doesn't mean they are mutually exclusive. But in every case I think the company exists prior to 99 percent of the investment that comes after something has been defined beyond profit.

PurpleBoxDragon 8y ago
>The share holders are free to take it or leave it. And they tend to take the offers from founders that give them voting power to decide the reason for the company to exist. If a founder wants to raise money without trading away power in the company they can try to sell such shares, but they should expect far less interest in people wanting to buy them. Also, should we really call them shareholders or investors at that point? They are more like backers, similar to people who spend money on kickstarter.