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Governments have secondary returns -- VC coming from government generally has restrictions (i.e. the money has to be spent on employees). Employees pay taxes. T
by charlesdm 8y ago
Governments have secondary returns -- VC coming from government generally has restrictions (i.e. the money has to be spent on employees). Employees pay taxes. Those people spend their money mostly locally. Even if every euro invested is lost, it'll still be profitable in most cases (because everything eventually flows back into the local economy).
- stickfigure 8y agoThis sounds eerily like the broken windows fallacy.
- charlesdm 8y agoYet this is how these things are set up. I know a VC fund manager solo managing a €50m fund, of which €20m came from the European Investment Bank, and €20m came from the local government. He put in €200k. Just €9.8m came from HNWIs. So he's getting 2% on €50m for 7 years, to invest €40m government money with pretty much no expectation of any return. Not bad, not bad at all. I'm sure "the people" would be outraged if they knew. But they don't.