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Its not a loan though. If you fail to make money from your venture, you don't owe the "lender" anything. So you remove the risk to you (you can't owe someone $1

Its not a loan though. If you fail to make money from your venture, you don't owe the "lender" anything. So you remove the risk to you (you can't owe someone $1 million without any way to pay it). The tradeoff is that you sacrifice some of the upside.

runarberg 6y ago
This still looks like a scam though. A predatory lender which never accepts paying down the capital, but assumes risks where some of their clients might not turn a profit and therefor is a net loss, will simply raise the interest (or—in the case of an investor—the share of the profits) from the profitable clients to counter the loss. This is exactly the behavior of shareholders, and to my eyes it still very much looks like a scam.
- AnimalMuppet 6y ago
  The shareholders don't set the amount of the dividends. That is, in your analogy, the lender doesn't get to raise the interest rate. That kind of blows up your analogy. But by all means, tell us again how it looks like a scam. Maybe we'll start to agree with you if you repeat it a couple more times.
  - runarberg 6y ago
    > The shareholders don't set the amount of the dividends True, the board of directors decide to pay the shareholders dividends. But in a hierarchical company to a worker, this board looks like a part of the scam. The relationship between a well paid board of directors (whom seemingly to a worker contributes nothing of value) and shareholders looks awfully convenient (one might even say conspiratory), and especially so if the board of directors are voted in by the shareholders. > But by all means, tell us again how it looks like a scam Sure. This whole thing looks like a stinky scam to me. And now knowing the relationship between the board of directors and shareholders of an average publicly traded company, even more so. Now it looks like a conspiracy as well.

runarberg 6y ago

This still looks like a scam though. A predatory lender which never accepts paying down the capital, but assumes risks where some of their clients might not turn a profit and therefor is a net loss, will simply raise the interest (or—in the case of an investor—the share of the profits) from the profitable clients to counter the loss. This is exactly the behavior of shareholders, and to my eyes it still very much looks like a scam.

AnimalMuppet 6y ago
The shareholders don't set the amount of the dividends. That is, in your analogy, the lender doesn't get to raise the interest rate. That kind of blows up your analogy. But by all means, tell us again how it looks like a scam. Maybe we'll start to agree with you if you repeat it a couple more times.
- runarberg 6y ago
  > The shareholders don't set the amount of the dividends True, the board of directors decide to pay the shareholders dividends. But in a hierarchical company to a worker, this board looks like a part of the scam. The relationship between a well paid board of directors (whom seemingly to a worker contributes nothing of value) and shareholders looks awfully convenient (one might even say conspiratory), and especially so if the board of directors are voted in by the shareholders. > But by all means, tell us again how it looks like a scam Sure. This whole thing looks like a stinky scam to me. And now knowing the relationship between the board of directors and shareholders of an average publicly traded company, even more so. Now it looks like a conspiracy as well.