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A Ponzi is when the returns of early investors are "sustained" by the flux of new investors. A cashflow producing venture is not a Ponzi since that cashflow is
by mratsim 6y ago
A Ponzi is when the returns of early investors are "sustained" by the flux of new investors.
A cashflow producing venture is not a Ponzi since that cashflow is supposed to ensure the returns of all investors.
- skybrian 6y agoThe problem with this definition is that it’s normal and legitimate for later investors to buy out early investors. You need to know more about what’s really going on to tell whether it’s a fraud or not. Recommended reading: Lying for Money: How Legendary Frauds Reveal the Workings of Our World